Answered: What is the marginal product of labor,… | bartleby

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

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4. Bella and Vela's Flower Shop is a store specializing in floral arrangements for weddings, graduations,
and other events. Jane and Vela’s Flower Shop has a fixed cost associated with space and equipment of
$150 per day. Each worker is paid $50 per day. The daily production function for Bella and Vela's
|Flower Shop is shown in the accompanying table. Each floral arrangement sells for $30
|Quantity of Labor (Workers)
|Quantity of Floral Arrangments
1
5
2
3
12
4
14
5
15
14
a. What is the marginal product of labor, MPL, of the first, second, third, fourth, fifth and sixth
workers? (Show on a chart).
b. What is the marginal revenue product, MRP, of each of the workers? (Show on a chart)
How many workers should Bella and Vela hire and why?
c.

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You are trying to figure out the multifactor productivity of your carrot farm. You had production of 436 pounds of carrots. You spent $1.50 per pound on fertilizer and used 2 pounds of fertilizer. Planting expenses were $50, and harvesting expenses were 190 hours at $10 per hour. What is your multifactor productivity, rounded to one decimal place?
2. Inputs and outputs Edison's Performance Pizza is a small restaurant in Philadelphia that sells gluten-free pizzas. Edison's very tiny kitchen has barely enough room for the three ovens in which his workers bake the pizzas. Edison signed a lease obligating him to pay the rent for the three ovens for the next year. Because of this, and because Edison's kitchen cannot fit more than three ovens, Edison cannot change the number of ovens he uses in his production of pizzas in the short run. However, Edison's decision regarding how many workers to use can vary from week to week because his workers tend to be students. Each Monday, Edison lets them know how many workers he needs for each day of the week. In the short run, these workers are inputs, and the ovens are inputs. Edison's daily production schedule is presented in the following table. Fill in the blanks to complete the Marginal Product of Labor column for each worker. Labor Output Marginal Product…
1 . Costs in the short run versus in the long run Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost (Dollars per bike) Number of Factories Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 440 280 240 320 480 800 2 620 380 240 240 380 620 3 800 480 320 240 280 440 Suppose Ike’s Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is ? per bike. Suppose Ike’s Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using (one factory, two…
Rita quit her job as dentist where she earned $150,000/year and converted a house that she owns into a museum for her collection of clocks. Before doing this, Rita had been renting the house out for $20,000/year. Rita hired 2 employees for her museum at a total cost of $50,000/year, and had to pay $10,000/year for utilities. Her museum brought in revenues of $125,000 the first year. Someone even offered her $1,000,000 to purchase her entire collection of clocks. She declined this offer. 1) What is Rita's accounting profit during the year? 2. What is Rita's economic profit? Please explain.
3. Understanding the least-cost rule Alex runs a surfing school on the North Shore of Oahu. He has two inputs: surfboards, which he rents from a local shop for $10 per day, and surfing instructors, whom he hires for $50 per day. Alex has figured out that the marginal physical product (MPP) of the last instructor hired is 15 lessons, and the MPP of the last board used is 2 lessons. Which of the following statements is correct? a. Alex could lower his costs without reducing his output if he employed fewer instructors and used more surfboards. b. Any of these answers may be right, depending on the price of a lesson. c. Alex currently employs a cost-minimizing combination of surfboards and instructors. d. Alex could lower his costs without reducing his output if he employed more instructors and used fewer surfboards.
Theory of Production1. If 1 orchard, 7 workers, and 3 tons of fertilizer yield 1,000 bushels of peaches, while 1 orchard, 7 workers, and 4 tons of fertilizer yield 1,300 bushels, a. the average product of labor equals 1,150 bushels. b. the marginal product of labor cannot be calculated. c. the average product of fertilizer equals 1,150 bushels. d. the marginal product of fertilizer cannot be calculated.When answering the next five questions (2-6), refer to the following graph.2. The marginal product of labor is rising with increased use of labor until a. 10 workers are employed. b. 20 workers are employed. c. 30 workers are employed. d. 40 workers are employed.3. The average product of labor is falling with increased use of labor once a. 10 workers are employed.. b. 20 workers are employed. c. 30 workers are employed d. 40 workers are employed.4. As long as fewer than 30 workers are employed, a. the average product of labor exceeds the marginal product of labor. b. the marginal product…
11. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two, or three factories. (Note: QQ equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) QQ = 100 QQ = 200 QQ = 300 QQ = 400 QQ = 500 QQ = 600 1 140 60 40 80 160 320 2 230 110 40 40 110 230 3 320 160 80 40 60 140 Suppose Ike’s Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost is per bike. Suppose Ike’s Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using .…
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