2010PF102030405060703090100LABOR (Hours per day)Complete the following table with your findings regarding the profit-maximizing outcome.Economic ObjectAmount per DayProfit-maximizing laborhoursProfit-maximizing outputlawnsProfit earnedTrue or False: At the profit-maximizing level of labor, the marginal product of labor is equal to the wage rate of $25 per hour.O TrueincreaseO FalsedecreaseIf the wage rate decreases, you will decreasethe production of raked lawns to maximize profit. Suppose that you are starting up a lawn-raking business. All of your workers are required to supply their own rakes, so the only cost to you is hiringlabor at an hourty rate. Suppose that the market price of raking someone's yard is $50 per lawn and the hourly wage is $25 per hour. The followinggraph shows the production function (PF) for your business.On the following graph, use the green line (triangle symbol) to plot the daily isoprofit curve that indicates the profit-maximizing level of output. (Hint:Derive the slope of the isoprofit curve and then move the curve up or down until it's in the position you warnt; this is because you do not know theamount of profit that will yield the desired curve.) Then use the black point (plus symbol) to indicate the profit-maximizing level of labor and outputper day.Note: You will not be graded on any adjustments made to the graph.10090Isoprofit30Profit Max40FF20LABOR Hours per dayLAWNS RAKED PER DAY

The objective function is written as: max; π = PQ - TC where the total cost is the hiring labor at…

Complete the following table with your findings regarding the profit-maximizing outcome. Economic Object Amount per Day Profit-maximizing labor hours Profit-maximizing output lawns Profit earned S True or False: At the profit-maximizing level of labor, the marginal product of labor is equal to the wage rate of $25 per hour. O True increase O False decrease If the wage rate decreases, you will decrease the production of raked lawns to maximize profit.

Complete the following table with your findings regarding the profit-maximizing outcome. Economic Object Amount per Day Profit-maximizing labor hours Profit-maximizing output lawns Profit earned S True or False: At the profit-maximizing level of labor, the marginal product of labor is equal to the wage rate of $25 per hour. O True increase O False decrease If the wage rate decreases, you will decrease the production of raked lawns to maximize profit.

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 is the difference between a fixed input and a variable input?
Can you please check my answers for the following question? Mandy owns a small coffee shop. Her production function is q=2K0.5L where q is the number of cups of coffee produces, K is the number of coffee machines, and L is the number of employees. If K=10 and L=20, the marginal rate of technical substitution is: 1 MLP= 2K0.5 MLK = L/K0.5 MRTS= 2K/L = 2(10)/20 =1 MRTS = w/r Starting from 10 machines and 20 employees, if Joe hires one more employee, then he can use ______ fewer machine(s) and still produce the same quantity of coffee. 1 fewer machine
Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $1.00. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 0 0 1 50 2 90 3 120 4 140 5 150 6 155 7 157 The marginal product of labor for the third hour of labor is ...????. (Enter your response as an integer.) The value of the marginal product of labor for the third hour of labor is ......???. (Round your response to two decimal places.) If the wage paid to workers in Die Cast's plant is $25/hour, it should employ ......??? worker(s). (Enter your response as an integer.) If the wage paid to workers in Die Cast's plant is $35/hour, it should employ ......???? worker(s). (Enter your response as an integer.) If…
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. When the firm uses 120 units of labor, what is its marginal cost at this output?
A small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. B. is not maximizing profit because the marginal revenue product of labor is less than the wage. C. is maximizing profit because the marginal product of labor is greater than the wage. D. is not maximizing profit because the price of the output is not equal to the wage. E. is not maximizing profit because the marginal product of labor is greater than the wage.
Assume a firm is trying to produce q0 units of output at the lowest total cost. The wage decreases, rotating the isocost line as shown in the below graph. Make the necessary changes to the graph to show the input combination that will now produce q0 at the lowest total cost. Make sure you show the new levels of labor and capital.
We often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain. For such production technologies, the marginal product of labor is increasing so long as the slope of the production frontier becomes steeper as we move toward more (we are increasing) the labor input.