5. A firm uses capital and labor in its production process. The marginal roduct for the last unit of labor is 5, the marginal product for the last unit of apital is 10, and the wage is $10. At what cost of hiring each unit of capital ould the firm be minimizing the cost of the current output? 0/5 a. $5 )b. $10 O c. $15 O d. $20

5. A firm uses capital and labor in its production process. The marginal roduct for the last unit of labor is 5, the marginal product for the last unit of apital is 10, and the wage is $10. At what cost of hiring each unit of capital ould the firm be minimizing the cost of the current output? 0/5 a. $5 )b. $10 O c. $15 O d. $20

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 3.7P

See similar textbooks

Similar questions

What are the factor payments for land, labor, and capital?
A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Identify the stages of production in the diagram and explain why the firm still hire labour even though it is in the range of diminishing returns. What is the number of workers after which diminishing marginal returns starts? Is this a short run or long run phenomenon? Labour (units) 1 2 3 4 5 6 7 8 9 Total Product (TP) in Units 8 15 24 30 35 37 38 38 36 Average Product (AP) in units 8 7.5 8 7.5 7 6.17 5.43 4.75 4 Marginal Product (MP) in units 8 7 9 6 5 2 1 0 -2
A perfect competitor charges a price of $30. The first worker he would hire would have a marginal physical product of 20, the second worker he would hire would have a marginal physical product of 18, the third worker would have a marginal physical product of 16, and the fourth worker would have a marginal physical product of 14. (a) How many workers would he hire if the wage rate were $540? worker(s) hired How much would his wage bill be? $ wage bill (b) How many workers would he hire if the wage rate were $470? worker(s) hired How much would his wage bill come to? $ wage bill.
define marginal product of labor and value of the marginal product of labor.describe how a competitive,profit-maximizing firm decides how many workers to hire.
12 true or false The point at which the marginal product of a variable input is at a maximum corresponds to the point at which marginal cost is at a maximum