Homework Help is Here – Start Your Trial Now!
Business
Economics
The table below shows the short-run production function for Josh's Consulting Firm. Number of Consultants Total Product per Hour 1 21 43 3 66 4 88 108 126 7 141 151 (a) After which consultant do diminishing marginal returns begin for Josh's Consulting Firm? Explain using numbers. (b) Assume Josh's Consulting Firm sells its consulting services in a perfectly competitive market at a unit price of $2. Calculate the marginal revenue product of the fifth consultant. Show your work. (c) Josh's Consulting Firm hires consultants in a perfectly competitive labor market for consultants at a wage rate of $41 per hour, and the market price of consulting services remains $2. How many consultants will Josh's Consulting Firm hire to maximize its profit? Explain using marginal analysis. (d) Assume the market price of consulting services increases as a result of an increase in the number of consumers. What will happen to each of the following?

The table below shows the short-run production function for Josh's Consulting Firm. Number of Consultants Total Product per Hour 1 21 43 3 66 4 88 108 126 7 141 151 (a) After which consultant do diminishing marginal returns begin for Josh's Consulting Firm? Explain using numbers. (b) Assume Josh's Consulting Firm sells its consulting services in a perfectly competitive market at a unit price of $2. Calculate the marginal revenue product of the fifth consultant. Show your work. (c) Josh's Consulting Firm hires consultants in a perfectly competitive labor market for consultants at a wage rate of $41 per hour, and the market price of consulting services remains $2. How many consultants will Josh's Consulting Firm hire to maximize its profit? Explain using marginal analysis. (d) Assume the market price of consulting services increases as a result of an increase in the number of consumers. What will happen to each of the following?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question
11:16 Fri 10O Dec * 9 80% ... managebac-prod-china.s3.cn-north-1.amazonaws.com.cn A 22 of 46 AP Microeconomics Page 21 of 46 AP CollegeBoard Test Booklet Unit 5 Problem Set - FRQ's Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The table below shows the short-run production function for Josh's Consulting Firm. Number of Consultants Total Product per Hour 1 21 2 43 3 66 4 88 108 6. 126 7 141 8. 151 (a) After which consultant do diminishing marginal returns begin for Josh's Consulting Firm? Explain using numbers. (b) Assume Josh's Consulting Firm sells its consulting services in a perfectly competitive market at a unit price of $2. Calculate the marginal revenue product of the fifth consultant. Show your work. (c) Josh's Consulting Firm hires consultants in a perfectly competitive labor market for consultants at a wage rate of $41 per hour, and the market price of consulting services remains $2. How many consultants will Josh's Consulting Firm hire to maximize its profit? Explain using marginal analysis. (d) Assume the market price of consulting services increases as a result of an increase in the number of consumers. What will happen to each of the following? (i) The marginal factor cost for Josh's Consulting Firm. Explain. (ii) The marginal revenue product curve for Josh's Consulting Firm. Explain. 19. Respond to all parts of the question. Please respond on separate paper, following directions from your teacher.
Transcribed Image Text:11:16 Fri 10O Dec * 9 80% ... managebac-prod-china.s3.cn-north-1.amazonaws.com.cn A 22 of 46 AP Microeconomics Page 21 of 46 AP CollegeBoard Test Booklet Unit 5 Problem Set - FRQ's Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The table below shows the short-run production function for Josh's Consulting Firm. Number of Consultants Total Product per Hour 1 21 2 43 3 66 4 88 108 6. 126 7 141 8. 151 (a) After which consultant do diminishing marginal returns begin for Josh's Consulting Firm? Explain using numbers. (b) Assume Josh's Consulting Firm sells its consulting services in a perfectly competitive market at a unit price of $2. Calculate the marginal revenue product of the fifth consultant. Show your work. (c) Josh's Consulting Firm hires consultants in a perfectly competitive labor market for consultants at a wage rate of $41 per hour, and the market price of consulting services remains $2. How many consultants will Josh's Consulting Firm hire to maximize its profit? Explain using marginal analysis. (d) Assume the market price of consulting services increases as a result of an increase in the number of consumers. What will happen to each of the following? (i) The marginal factor cost for Josh's Consulting Firm. Explain. (ii) The marginal revenue product curve for Josh's Consulting Firm. Explain. 19. Respond to all parts of the question. Please respond on separate paper, following directions from your teacher.
11:21 Fri 10 Dec VPN O 79% managebac-prod-china.s3.cn-north-1.amazonaws.com.cn A 30 of 46 Molly's Motorcycles is the only motorcycle repair shop in a small remote town, and Molly's Motorcycles is the only employer of mechanics in the area. The graph below shows the market for mechanics with the marginal factor (resource) cost curve, the labor supply curve, and the marginal revenue product curve. ‚Marginal Factor Cost Supply 44 38 32 26 17 Marginal Revenue Product 8 180 210 150 300 315 360 400 Quantity of Mechanics 45 90 120 240 (a) Identify the profit-maximizing number of mechanics that Molly's Motorcycles will hire. Explain using the labeling on the graph. (b) Identify the profit-maximizing wage rate that Molly's Motorcycles will pay its mechanics. Explain using the labeling on the graph. (c) If the wage rate is $38, state whether there will be a shortage or a surplus of mechanics and calculate its size. Show your work. (d) If the marginal product of mechanics decreases, what will happen to the quantity of services provided by Molly's Motorcycles? Explain. (e) Assume instead that Molly's Motorcycles uses both labor and capital in providing its services. The marginal product of the last unit of labor hired is 100 repairs per day and the marginal product of the last unit of capital rented is 60 repairs per Page 30 of 46 AP Microeconomics AP CollegeBoard Test Booklet Unit 5 Problem Set - FRQ's day; the daily wage rate for labor is $20 and the daily rental price for capital is $30. To minimize the cost of providing its current level of service, should Molly's Motorcycles rent more capital, less capital, or the same amount of capital? Explain using marginal analysis. Wage Rate ($)
Transcribed Image Text:11:21 Fri 10 Dec VPN O 79% managebac-prod-china.s3.cn-north-1.amazonaws.com.cn A 30 of 46 Molly's Motorcycles is the only motorcycle repair shop in a small remote town, and Molly's Motorcycles is the only employer of mechanics in the area. The graph below shows the market for mechanics with the marginal factor (resource) cost curve, the labor supply curve, and the marginal revenue product curve. ‚Marginal Factor Cost Supply 44 38 32 26 17 Marginal Revenue Product 8 180 210 150 300 315 360 400 Quantity of Mechanics 45 90 120 240 (a) Identify the profit-maximizing number of mechanics that Molly's Motorcycles will hire. Explain using the labeling on the graph. (b) Identify the profit-maximizing wage rate that Molly's Motorcycles will pay its mechanics. Explain using the labeling on the graph. (c) If the wage rate is $38, state whether there will be a shortage or a surplus of mechanics and calculate its size. Show your work. (d) If the marginal product of mechanics decreases, what will happen to the quantity of services provided by Molly's Motorcycles? Explain. (e) Assume instead that Molly's Motorcycles uses both labor and capital in providing its services. The marginal product of the last unit of labor hired is 100 repairs per day and the marginal product of the last unit of capital rented is 60 repairs per Page 30 of 46 AP Microeconomics AP CollegeBoard Test Booklet Unit 5 Problem Set - FRQ's day; the daily wage rate for labor is $20 and the daily rental price for capital is $30. To minimize the cost of providing its current level of service, should Molly's Motorcycles rent more capital, less capital, or the same amount of capital? Explain using marginal analysis. Wage Rate ($)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question

(b) Identify the profit-maximizing wage rate that Molly's Motorcycles will pay its mechanics. Explain using the labeling on the graph.

Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Marginal Product
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS