The marginal product of effort, a typical worker in fast-food burger joint, is one- fourth burgers per hour; that is, MPe = .25The price of a burger is $2. The figure graphs Mac’s marginal cost of effort. If Mac increases his effort by one unit per hour, the change in the burger joint’s revenue is $ per hour. That is, what is VMPe , the value of Mac ‘s marginal product of effort ? Plot the VMPe curve in the figure. Mac efficient effort e^ is the solution to what equation? Illustrate the solution in the figure. Mac efficient effort is e^ = units of effort per hour. If the price of a burger rises from $2.00 to $2.80, what happens to Mac’s efficient level of effort? If marginal -cost-effort curve shifts down, what happens to e^? Suppose the market for fast food workers like Mac is competitive. If Mac’s quantity supplies of effort is efficient, how much does the earn per hour?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The marginal product of effort, a typical worker in fast-food burger joint, is one-

fourth burgers per hour; that is, MP_e = .25The price of a burger is $2. The figure

graphs Mac’s marginal cost of effort.

If Mac increases his effort by one unit per hour, the change in the burger joint’s revenue is $ per hour. That is, what is VMP_e, the value of Mac ‘s marginal product of effort ? Plot the VMP_e curve in the figure.

Mac efficient effort e^ is the solution to what equation? Illustrate the solution in the figure. Mac efficient effort is e^ = units of effort per hour.

If the price of a burger rises from $2.00 to $2.80, what happens to Mac’s efficient level of effort?

If marginal -cost-effort curve shifts down, what happens to e^?

Suppose the market for fast food workers like Mac is competitive. If Mac’s quantity supplies of effort is efficient, how much does the earn per hour?

VMPe
(cents/unit)
60
50
40
30
20
10
Mac's marginal cost of effort.
0
oms ²
MC
2 4 6 8 10 12 14 effort
(units/hour)

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