Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 19, Problem 4IAPA
To determine
To compute:
Changes in the marginal product of worker and their number due to rise in price of coffee from $4 to $5.
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You own a small sandwich shop with two employees. They've asked you to consider hiring additional workers for the lunch shift, but you are concerned that doing so may cut into you're profits. Using the table below, calculate the marginal product, value of marginal product, and marginal profit of hiring additional workers.
What action should you take (choose one)
A. Hire two more employees
B. Hit one more employee
C. Fire one employee
D. Do not hire anyone
Stephanie is looking to hire workers to help her produce earrings. The current hourly market wage rate is $10 per worker. Assume this
is a perfectly competitive market.
Instructions: Enter your answers as a whole number.
a. Fill in the "Total Labor Cost" and "Marginal Resource Cost" columns in the table below.
Stephanie's Resource Costs
Labor
(workers)
0
1
2
3
4
5
6
7
$10
b. Graph the marginal resource cost of labor (MRC) for Stephanie's business.
Instructions: Use the tool provided 'MRC' to plot the line point by point, starting from 1 worker up to 7 workers (7 points total).
Wage Rate (dollars per hour)
$12
$8
$6
Total Labor Cost
(dollars per hour)
$0
$4
$2
Marginal Resource Cost
Marginal Resource Cost
(dollars per hour)
$
Tools
/
MRC
Chapter 19 Solutions
Foundations of Economics (8th Edition)
Ch. 19 - Prob. 1SPPACh. 19 - Prob. 2SPPACh. 19 - Prob. 3SPPACh. 19 - Prob. 4SPPACh. 19 - Prob. 5SPPACh. 19 - Prob. 6SPPACh. 19 - Prob. 7SPPACh. 19 - Prob. 8SPPACh. 19 - Prob. 9SPPACh. 19 - Prob. 10SPPA
Ch. 19 - Prob. 1IAPACh. 19 - Prob. 2IAPACh. 19 - Prob. 3IAPACh. 19 - Prob. 4IAPACh. 19 - Prob. 5IAPACh. 19 - Prob. 6IAPACh. 19 - Prob. 7IAPACh. 19 - Prob. 8IAPACh. 19 - Prob. 9IAPACh. 19 - Prob. 1MCQCh. 19 - Prob. 2MCQCh. 19 - Prob. 3MCQCh. 19 - Prob. 4MCQCh. 19 - Prob. 5MCQCh. 19 - Prob. 6MCQCh. 19 - Prob. 7MCQ
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- Robert can make 10 pizzas each hour. He works 8 hours each day. He is paid $100 a day. The shop can sell the pizzas for $15 each. What is the pizza shop's marginal profit from hiring Robert?arrow_forward10. The following is a total cost curve. Sketch the corresponding marginal cost curve. If the price of output is $3 and there are no fixed costs, what is the profit-maximizing level of output?arrow_forwardSuppose Fred produces 500 litres of milk every day with 10 workers. The price of milk is $12 per litre, and each worker is paid $550 daily. If the marginal product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred increase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forward
- Taco King produces tacos The market for tacos is perfectly competitive, and the price is $3.50 a taco. The labor market is competitive, and the wage rate is $105.00 a day The table shows part of the workers total product schedule Calculate the marginal product of hiring the third worker and the value of the marginal product of the third worker The marginal product of hiring the third worker is tacos a day The value of the marginal product of the third worker is Saday 1 C Workers 2 3 4 5 6 Tacos per day 44 80 110 134 146arrow_forwardStephanie is looking to hire workers to help her produce earrings. The current hourly market wage rate is $10 per worker. Assume this is a perfectly competitive market. Instructions: Enter your answers as a whole number. a. Fill in the “Total Labor Cost” and “Marginal Resource Cost” columns in the table below. Stephanie's Resource Costs Labor (workers) Total Labor Cost (dollars per hour) Marginal Resource Cost (dollars per hour) 0 $0 — 1 $ 2 3 4 5 6 7 b. Graph the marginal resource cost of labor (MRC) for Stephanie's business. Instructions: Use the tool provided "MRC" to plot the line point by point, starting from 1 worker up to 7 workers Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardGive typing answer with explanation and conclusionarrow_forward
- 10 20 30 40 50 More than 50arrow_forwardStephanie produces earrings. She sells each pair of earrings for $5. The table below shows how many pairs of earrings can be produced, depending on the number of workers Stephanie hires. Fill in the "Total Revenue" and "Marginal Revenue Product" columns using the information given. Assume this is a perfectly competitive market. Instructions: Enter your answers as a whole number. Stephanie's Earring Shop and Revenues Labor Total Product (pairs of (workers) 8 1 2 3 4 5 6 7 earrings) 0 28 44 58 71 82 90 95 Marginal Product (pairs of earrings) 28 16 14 13 11 8 5 Price (dollars) $5 5 5 5 5 5 5 5 Total Revenue (dollars) $0 Marginal Revenue Product (dollars) $arrow_forwardCorrectly illustrate graphs for BOTH the market and a firm in perfect competition in the market: a. Illustrate a market for bottled water. Bottled water is sold in perfect competition. A firm is hiring at the profit-maximizing amount. The bottling machines increase in price. Illustrate any effects of this change on the labor market and/or for this firm.arrow_forward
- Question 1 The market for drones is perfectly competitive. Labor is the only variable input. The fixed cost is $500. Based on the information in the table below, what is the Marginal Product of Labour when Q-300? Enter a number only, drop the $ sign. Wage rate $100 per unit of Labour Quantity of Quantity of Labour Output 2 49 119 300 15 26 51 400arrow_forwardAmanda owns a small bakery in the perfectly competitive pastry industry. She is considering whether to hire an additional pastry chef. The wage rate for pastry chefs is $1,000 per week; the marginal product of an additional pastry chef is 1,000 pastries per week; and the unit price of pastries is $1.25. Amanda should: O hire the additional pastry chef. not hire the additional pastry chef. raise the price of the pastries. O Not enough information is given to answer the question.arrow_forwardThe following table contains the relationship between a number of trainers working at a new gym and the number of client's they can train. These client's represent the output of trainers. Client's pay $40 per session. A. Find the marginal product of labor (mpl) and the value of the marginal product of labor (vmpl) for each additional trainer hired and record these numbers in columns in the table. B. Premier trainers earn $200 an hour. How many trainers will the gym hire?arrow_forward
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