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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Chapter 18, Problem 3.3P
To determine
Identify the concept of human capital and compensation differentials.
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Number ofWorkersEmployed
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Value ofMarginalProduct ($)(Market Price=2$)
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8
2
22
3
36
4
56
5
60
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72
7
82
8
89
Derive Marginal Product and Value of Marginal Product from the following table when market price for the product is 1$ and 2$ .
Q33
In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital and finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. Justin Trudeau product sells for $3 per unit, and the wage rate is $13 per worker. The marginal product of the second worker is
Multiple Choice
32
14.
8
1
5
Q49
In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. The marginal revenue product of the second worker is
Multiple Choice
$9
$15
$24
$8
$14.
Chapter 18 Solutions
Principles of Economics (12th Edition)
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- Q35 In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. Justin Trudeau's product sells for $3 per unit, and the wage rate is $13 per worker. What is Justin Trudeau's profit-maximizing output? Multiple Choice 16. 40 37 20 32arrow_forwardAnswer the next question based on the information given in the following table. Total Workers Revenue $900 1,600 2,100 2,400 2,500 4. What is the marginal revenue product of the third worker? Multiple Choice $500 $700 $300 $2100arrow_forwardImagine we have the two datasets below (the first named person_age.dta and the second rent.dta) person_id county_id age 1 1 1 48.37863 23 2 2 2 39.79116 3 3 3 59.02524 4 4 4 40.65527 5 6 56 7 7 8 8 1 29.78645 2 3 52.80093 4 52.46461 county_id average_rent 55.16973 1 1 1348.872 2 2 1266.886 3 3 1136.646 4 4 1028.557 If we first load in person_age.dta and then merge to rent.dta, the correct code from the merge command would bearrow_forward
- Labour relations is the term which refers the relationship between individual employees and employers, as well as the relationship between collectives (trade unions, employers’ organisations, and the state) and the individuals. Contrast the role of the employer with that of the employee in the employment relationship.arrow_forwardThe following table shows the relationship between the number of workers employed and outputs at Wendy’s Café. Number of Workers Cups of Coffee Produced (per day) 1 50 2 95 3 135 4 170 5 200 6 225 Suppose the market price of each cup of coffee is $20, and the market daily wage for each worker is $800. In order to maximize profit, how many workers should Wendy’s Café employ? Explain and show the steps of your calculations. (b) The following diagram shows the market for medical checkup. What are the equilibrium price and quantity of medical checkup? Which kind of externality problems exists in the market for medical checkup? How does this externality problem affect the efficiency of the market? Explain in detail. How can the government solve this…arrow_forwardA company has the following production relationships: Number of Workers Output 11 18 26 33 4 The marginal product of the fourth worker is units. If the marginal product of the third worker were 7 units, and the price of the output is $10, the third worker's marginal revenue product is $ If the marginal product of the third worker were 7 units, and the price of the output is $10, then the maximum amount the company would be willing to pay the third worker if he or she were hired is $ Suppose initially the marginal product of the third worker were 7 units and the price of the output is $10. Then the output market improves dramatically and the output price doubles to $20. The new maximum amount the company would be willing to pay the third worker is $ Suppose initially the marginal product of the third worker were 7 units and the price of the output is $10. Then a new technology makes each worker more productive and marginal product doubles. The new maximum amount the company would be…arrow_forward
- Question 11 Refer to Figure 1 in Question 11. The car-repair shop charges $150 per repair. What is the value of the marginal product of the third mechanic? (Enter your answer without a dollar sign)arrow_forwardA restaurant with one, two, three, or four employees can serve 35, 50, 64, or 75 customers, respectively. The marginal product of the third worker is:arrow_forwardHigh Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about how many plastic chairs can be produced per hour. Number of Workers Chairs Produced per Hour 1 10 2 18 3 24 4 28 5 30 Please enter your answers for Value of the Marginal Product as numerical answers rounded to the nearest dollar (ie. 30 or $30, not "Thirty dollars." When answering how many workers the firm will hire just enter a number from 0-5 and nothing else (ie. 4 not "Four" or "Four workers"). What is the "Value of the Marginal Product" (VMP) for the third worker? What is the Value of the Marginal Product (VMP) for the fifth worker? How many workers will this firm hire if the hourly wage rate for workers is $70/hour How many workers will this firm hire if the hourly wage rate for workers is $50/hourarrow_forward
- When workers move from one industry to another in response to demand changes, this is an example of Multiple Choice O factor mobility. the decreasing investment in human capital. capital stock. factor quality.arrow_forwardQ25arrow_forwardTable 16-2 Quantity of Labor Output of iPods per Week Marginal Product of Labor Product Price (dollars) Wage (dollars) 1 8 8 $300 $350 2 15 7 280 350 3 21 6 260 350 4 26 5 240 350 5 30 4 220 350 6 33 3 200 350 7 35 2 180 350 For the production data represented in this table, assume that labor is the only variable input. Refer to Table 16-2. The marginal profit from hiring the second unit of labor is Group of answer choices $4,200. $1,960. $1,450. $1,800.arrow_forward
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