In the diagram, a minimum wage of $7 causes an opportunity for firms to exploit workers. The implicit cost that workers may face from this exploitatie area Wage 10 Quantity of laber OY W Ov+Y Ow+x
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- Other than the demand for labor, what would be another example of a 'derived demand?Andrea Mowry is a knitwear designer, and she has a firm DreaReneeKnits. She uses knittersas labour and only uses one variable cost – yarn – and one fixed cost – the price of knittingneedles. She pays R100 for a knitter, R50 for yarn and R100 for knitting needles. Use thisinformation to complete the table values askes and questions below. LABOUR TP MP AP TFC TVC TC ATC MC 0 0 - - 100 0 100 - - 1 2 2 2 100 150 250 125 150 2 5 (a) 2.5 100 300 (d) (e) 66.67 3 9 4 3 100 450 550 61.11 (f) 4 12 3 (b) 100 (c) 700 58.33 50 5 15 2 2.8 100 750 850 60.71 75 a. Complete values a-f.b. Using to the law of diminishing returns, place the concepts in order in which theyreach their turning points: average product, total product, marginal product. c. In the example above, at what value does average total cost and marginal cost reachtheir turning point? d. Beyond the turning point in average variable cost, marginal cost lies _______average variable cost.Andrea Mowry is a knitwear designer, and she has a firm DreaReneeKnits. She uses knittersas labour and only uses one variable cost – yarn – and one fixed cost – the price of knittingneedles. She pays R100 for a knitter, R50 for yarn and R100 for knitting needles. Use thisinformation to complete the table values askes and questions below. LABOUR TP MP AP TFC TVC TC ATC MC 0 0 - - 100 0 100 - - 1 2 2 2 100 150 250 125 150 2 5 (a) 2.5 100 300 (d) (e) 66.67 3 9 4 3 100 450 550 61.11 (f) 4 12 3 (b) 100 (c) 700 58.33 50 5 15 2 2.8 100 750 850 60.71 75 a. Complete values a-f.
- Lorna’s Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is: a. $10. b. $14. c. $120. d. $140. e. $240.Geralt works for Stregobor as a witcher earning $87,000 a year. He decides to quit his job andbecome a freelance witcher. As a freelancer, he spends $7000 on herbs and weapons. Insurancecosts him $1000 a year. He pays himself $145,000 as a salary. His total revenues for the year are$191,000. Based on this information, what were his economic costs as a freelance witcher?Question 4Andrea Mowry is a knitwear designer, and she has a firm DreaReneeKnits. She uses knittersas labour and only uses one variable cost – yarn – and one fixed cost – the price of knittingneedles. She pays R100 for a knitter, R50 for yarn and R100 for knitting needles. Use thisinformation to complete the table values askes and questions below.Labour TP MP AP TFC TVC TC ATC MC0 0 - - 100 0 100 - -1 2 2 2 100 150 250 125 1502 5 (a) 2.5 100 300 (d) (e) 66.673 9 4 3 100 450 550 61.11 (f)4 12 3 (b) 100 (c) 700 58.33 505 14 2 2.8 100 750 850 60.71 75 a. Complete values a-f.b. Using to the law of diminishing returns, place the concepts in order in which theyreach their turning points: average product, total product, marginal product. c. In the example above, at what value does average total cost and marginal cost…
- If the market value of the output of the last worker hired by a firm (VMPL) is higher than the wage paid to the worker, what should the firm do? a.Hire more workers b.Keep the same number of workers c.Lay off workers d.Change its production methods1. The Al-Maskri Company in Seeb makes flower pots and receives RO 10 for each finished pot. Mr. Al-Maskri’s only factors of production are flower pot machine operators (labor) and a small building where the laborers work from. The number of flower pots per day the company produces depends on the number of employee-hours per day as shown below. The wage is RO 15 per hour. Number of pots per day Number of employee-hours per day0 05 110 215 420 725 1130 1635 22 (a) Mr. Al-Maskri’s daily fixed cost for the flower pot making machine and building is RO 60. Complete the following Table showing total revenue, variable cost, total cost, and daily profit for various quantities of daily flower pot production. Quantity of Pots per day Total RevenueRO per day Variable CostsRO per day Total CostsRO per day ProfitRO per day0 0 0 60 -605 75 -2510 15 20 105 25 30 300 35 -40 (b) The profit maximizing quantity of pots is __________ and at that number of pots the daily profit made is RO…Farmer Joe’s production function is f(x1, x2) = x1/31 x1/32, where x1 isthe number of pounds of lemons he uses and x2 is the number of hours he spendssqueezing them. His cost function is c(w1, w2, y) = 2w1/21 w1/22y3/2, where y is thenumber of units of lemonade produced.(a) If lemons cost $1 per pound, the wage rate is $1 per hour, and theprice of lemonade is p, what is his marginal cost function?(b) What is his supply function?(c) If lemons cost $4 per pound, the wage rate is $9 per hour, and theprice of lemonade is p, explain in detail how these changes would affect theoriginal supply function in part (b)?
- To maximize profits, a firm uses a fixed amount of capital and varying amounts of labour inits production processes to produce commodity Y. The output fetches Kshs 3 in the market andthe firm’s production is as summarized.Number of workers Output per hour0 01 92 173 244 305 356 397 428 44 Required;i.Calculate the marginal product of labour for this firm and the value of the marginal productof labour and the Marginal Revenueii.Suppose that the competitive wage for workers who can make Product Y is Ksh16 perhour. How many workers should this firm hire and why?A firm hires two workers to assemble bicycles. The firm values each assembly at $12. Charlie’s marginal cost of allocating effort to the production process is MC = 4N, where N is the number of bicycles assembled per hour. Donna’s marginal cost is MC = 6N. a. If the firm pays piece rates, what will be each worker’s hourly wage? b. Suppose the firm pays a time rate of $15 per hour and fires any worker who does not assemble at least 1.5 bicycles per hour. How many bicycles will each worker assemble i n a n e ight-hour day?A firm hires two doctors to help injured workers. The firm values fixing each injured worker at $72. Ashley’s marginal cost of allocating effort to the helping injured workers is 6N, where N is the number of workers helped per day. Brennan’s marginal cost is 8N. a) If the firm pays piece-rates, what will be each worker’s daily wage? How many workers do Ashley and Brennan each help in a day? b)Suppose the firm pays a time rate of $600 per day and fires any doctor who does not help at least 8injured workers per day. How many injured workers will each doctor help in a day?
