True or false? why? 1. Mr. Krabs' restaurant have two inputs: capital and labor. The rent (unit cost of capital) and wage (unit cost of labor) are $1,000 and $200, respectively. He currently has one unit of capital and four employees and makes 1,200 burgers every week. The fifth employee, if hired, will increase the burger production by 200. If he hires the fifth employee, the marginal cost will be higher than the average cost. 2. Johnny and Jeanie have different jobs but have the same expected income and pay the same risk premium. They must have the identical utility-income curves.

True or false? why? 1. Mr. Krabs' restaurant have two inputs: capital and labor. The rent (unit cost of capital) and wage (unit cost of labor) are $1,000 and $200, respectively. He currently has one unit of capital and four employees and makes 1,200 burgers every week. The fifth employee, if hired, will increase the burger production by 200. If he hires the fifth employee, the marginal cost will be higher than the average cost. 2. Johnny and Jeanie have different jobs but have the same expected income and pay the same risk premium. They must have the identical utility-income curves.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

What is die price commonly called in the labor market?
If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?
Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?
(TCO C) You have been hiredto manage a small manufacturing facility whose cost and productiondata are given in the table below.No. of workers Total LaborCost Output TotalRevenue 1 $150 100 $170 2 300 108 550 3 450 114 1150 4 600 119 1470 5 750 123 1600 6 900 125 1700 7 1050 126 1750 Based on your knowledge of marginal analysis, how manyworkers should you hire? Explain youanswer.
. If Al-quds firm has $ 800 to be spent on two factors of production, the price of labour PL = $ 10 , and the price of machine Pm = $ 4. 1. Derive and draw the Iso-cost line ? 2. Derive the Iso-cost line formula ? 3. If the producer equilibrium occurs when the number of labor is 60 workers, and the output is 500 units. Calculate and draw the quantity of machines that achieves the equilibrium ?