Rehana owns a famous chitoi pitha stall in Dhaka University campus. She pays an hourly wage of 40 taka to her workers and each pitha sells for 8 taka. The table below gives her production function. Quantity of workers Quantity of pitha MPL (pitha) VMPL (taka) 0 0 1 36 2 60 3 76 4 88 5 96 a) Complete the above table. (show calculation) b) Draw the value of the marginal product of labor curve and the wage curve on one diagram. c) Use your diagram to determine how many workers Rehana should employ in order to maximize her profit?
Rehana owns a famous chitoi pitha stall in Dhaka University campus. She pays an hourly wage of 40 taka to her workers and each pitha sells for 8 taka. The table below gives her production function. Quantity of workers Quantity of pitha MPL (pitha) VMPL (taka) 0 0 1 36 2 60 3 76 4 88 5 96 a) Complete the above table. (show calculation) b) Draw the value of the marginal product of labor curve and the wage curve on one diagram. c) Use your diagram to determine how many workers Rehana should employ in order to maximize her profit?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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4. Rehana owns a famous chitoi pitha stall in Dhaka University campus. She pays an hourly wage
of 40 taka to her workers and each pitha sells for 8 taka. The table below gives her production
function.
Quantity of workers | Quantity of pitha | MPL (pitha) | VMPL (taka) |
0 | 0 | ||
1 | 36 | ||
2 | 60 | ||
3 | 76 | ||
4 | 88 | ||
5 | 96 |
a) Complete the above table. (show calculation)
b) Draw the value of the marginal product of labor curve and the wage curve on one diagram.
c) Use your diagram to determine how many workers Rehana should employ in order to maximize
her profit?
5. The Bangladesh Government decides to buy laptops for all university students causing the
supply of labor to fall in the laptop manufacturing industry. True or False? Explain.
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