Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 10, Problem 1.6P
To determine
Marginal cost curve and marginal revenue product curve.
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In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the following table
Suppose that for the firm, the goods market is perfectly competitive. The market price of the product is $5 at each quantity supplied by the firm
Marginal Factor
Cost
Total Physical
Product
100
109
77
117
108
124
143
130
182
135
225
What is the amount of labor that this profit-maximizing firm will hire? workers (Enter a numerio response using an integer)
Labor
Supplied
10
11
12
13
14
15
Hourly Wage
Rate (5)
7
9
11
13
15
Total Wage
Cost
50
27
31
35
39
43
Site
The following table shows the production function for a company.
This company sells its product in a perfectly competitive product market at a price of $4 each and hire labor in a perfectly competitive labor market at a wage of $450 per week.
Calculate the Marginal MarginalProduct of the 1st, 2nd, and 3rd.
Calculate the Value ofMarginal Product of the 1st, 2nd, and 3rd
How many workers should it hire? How do you know? Explain your answer.
Show formulas and some of your calculations.
Consider a perfectly competitive firm that uses labor as an input. The firm faces a market price of $10 for each
unit of its output. The total product, and the marginal product of labor that the firm receives from hiring 1 to 5
workers are reported in the table below. What is the value of the marginal product of labor (VMP) for the first
worker?
Value of the Marginal Product of Labor
Labor input (# workers) Total product (# goods) Marginal Product of Labor (MPL)
1
17
18
13
|22
4
25
3
26
Provide your answer below:
Chapter 10 Solutions
Principles of Economics (12th Edition)
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