The Apple Pie Factory produces apple pies. The firm sells its product and hires its workers in competitive markets. The market price (p) for a pie is $5 and the wage rate (w) is $28 per hour. The table below shows the total hourly production (Q) for varying amounts of workers (L). (Remember that for a price-taking firm, p= MR.) a-b. Fill in the p and w columns and calculate the MP and the MRP for each amount of labour employed. (Enter your responses rounded to the nearest whole numbers.) MRP ($) L 8 9 10 11 12 Q 65 72 78 83 87 W $ $ $ $ $ $ $ р MP $

The Apple Pie Factory produces apple pies. The firm sells its product and hires its workers in competitive markets. The market price (p) for a pie is $5 and the wage rate (w) is $28 per hour. The table below shows the total hourly production (Q) for varying amounts of workers (L). (Remember that for a price-taking firm, p= MR.) a-b. Fill in the p and w columns and calculate the MP and the MRP for each amount of labour employed. (Enter your responses rounded to the nearest whole numbers.) MRP ($) L 8 9 10 11 12 Q 65 72 78 83 87 W $ $ $ $ $ $ $ р MP $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Imagine you've been hired as the manager of a firm producing a certain product X. The following schedule shows the total production per week of product X Additionally, assume each unit of product X sells for $10 per unit, workers can be hired in a competitive labor market for $500 per week, and the rental price of a unit of capital is $R per week Capital (K) Quantity (Q) Labor (L) 0 5 0 1 5 40 2 5 105 3 5 170 4 5 245 5 5 325 6 5 410 7 5 500 8 5 595 9 5 695 10 5 760 11 5 810 12 5 855 13 5 890 14 5 915 15 5 930 a. How many workers should be hired? To answer this question, append to the above table three new columns similar to columns (3), (4) and (5) of Table 5-2 in your textbook. Explain your final answer!
1. Suppose a short-run production function is described as Q40L 0.04L2 where L is the number of labors used each hour.
If the marginal product of labor is 50 per day, and if the market is $4.50, calculate the marginal revenue product.
Assume a firm is trying to produce q0 units of output at the lowest total cost. The wage decreases, rotating the isocost line as shown in the below graph. Make the necessary changes to the graph to show the input combination that will now produce q0 at the lowest total cost. Make sure you show the new levels of labor and capital.
An economic downturn has caused the labor demand to decrease from DO to D1. In the short-run what will be the new wage and level of employment? Wage Rate 40 35 30 ($) 25 20 20 15 10 DO 5 D1 0 5 10 15 20 25 30 35 40 Quantity of Labor (Q)
If the marginal product of labor increases because of a technological advancement, it will likely cause a fall in the number of workers employed. an increase in the price of output produced by labor. a fall in the wage paid to labor. an increase in demand for labor. an increase in the supply of labor.
Suppose, the demand and supply curve in a US manufacturing firm are provided as follows: ES = 20 + 2w ED = 70 − 3w where E is the level of employment and w is the hourly wage. Let’s assume this firm shows the representative wage of the manufacturing industry. Suppose the price of each unit of capital used in this industry is $25. The price of output is constant at $50 per unit. The production function is f(E,K) = E½K ½ , so that the marginal product of labor is MPE = (½)(K/E) ½ If the current capital stock is fixed at 1,600 units, how much labor should the industry employ in the short run? How much profit will the industry earn?
Consider a competitive firm in both input and output markets. The production function for this firm is given by q = 10 (KL)^.2. The price of K is $1 and the price of the output is $5. Derive the demand for labor when K is variable.
Hand written solutions are strictly prohibited
38) In the short run, the marginal product of labor might increase initially as more workers are hired because A) the first workers hired get to use the best equipment. B) specialization allows a worker to focus on one task, thereby increasing her proficiency at that task. C) the best workers are hired first and later hires are not as skillful. D) beyond some point, a firm has hired too many workers.
Use the following information to answer the following questions: Mickey L. Douglas, owner of MLD Incorporated, knows that the marginal product of labor (MPL) for his workers can be defined as follows: MPL = 32 - L The total output a given level of workers can produce is found as: Q=32L-1/2 L² He also knows that the price of his output is $3. His profits can be found as: Profit=(PxQ)-(W x L) What wage would be required to allow Mickey to hire the twenty-fifth worker? O $21 O $7 O $125 O $3 $25
Suppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. Given this market structure, how many assembly workers will Zamboni Enterprises choose to hire? How many zambonis will Zamboni Enterprises produce and sell? What will be the price of a zamboni? If the market for zambonis were competitive, how many zambonis would be produced? If the market for…