EBK PRINCIPLES OF MICROECONOMICS
12th Edition
ISBN: 8220101472311
Author: Oster
Publisher: PEARSON
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Question
Chapter 10, Problem 1.6P
To determine
Marginal cost curve and marginal revenue product curve.
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Students have asked these similar questions
In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the following table
Suppose that for the firm, the goods market is perfectly competitive. The market price of the product is $5 at each quantity supplied by the firm
Marginal Factor
Cost
Total Physical
Product
100
109
77
117
108
124
143
130
182
135
225
What is the amount of labor that this profit-maximizing firm will hire? workers (Enter a numerio response using an integer)
Labor
Supplied
10
11
12
13
14
15
Hourly Wage
Rate (5)
7
9
11
13
15
Total Wage
Cost
50
27
31
35
39
43
Site
The following table shows the production function for a company.
This company sells its product in a perfectly competitive product market at a price of $4 each and hire labor in a perfectly competitive labor market at a wage of $450 per week.
Calculate the Marginal MarginalProduct of the 1st, 2nd, and 3rd.
Calculate the Value ofMarginal Product of the 1st, 2nd, and 3rd
How many workers should it hire? How do you know? Explain your answer.
Show formulas and some of your calculations.
Consider a perfectly competitive firm that uses labor as an input. The firm faces a market price of $10 for each
unit of its output. The total product, and the marginal product of labor that the firm receives from hiring 1 to 5
workers are reported in the table below. What is the value of the marginal product of labor (VMP) for the first
worker?
Value of the Marginal Product of Labor
Labor input (# workers) Total product (# goods) Marginal Product of Labor (MPL)
1
17
18
13
|22
4
25
3
26
Provide your answer below:
Chapter 10 Solutions
EBK PRINCIPLES OF MICROECONOMICS
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Similar questions
- Suppose that labor is the only input used by a perfectly competitive firm that can hire workers for $500 per week. Complete the table below, when each unit of output sells for $10. What amount of labor force should be hired? Explain!arrow_forwardWhich of the following scenarios would best represent the backwards supply curve seen on the Labor Supply Graph? Group of answer choices Katie is offered double time for every hour she works over 40 each week. She signs up for an extra 20 hours a week. Kalia got a promotion and a raise, she books 2 extra weeks of vacation for next year. Josie took 3 weeks of vacation last year. This year, she got a new job with higher pay and decides to take 1 week of vacation instead.arrow_forwardWhich of the following events may increase the marginal product of labor? Check all that apply. An increase in the wage rate A technological improvement that is complementary for this type of labor A technological improvement that is substitutable for the labor in this market Good weather causes an increase in supply and a fall in price for one of the inputs used to make the goodarrow_forward
- A manager hires labour and rents capital equipment in a very competitive market. Currently the wage rate is $12 per hour and capital is rented at $8 per hour, whereas the marginal product of labour is 60 units of output per hour and the marginal product of capital is 45 units of output per hour. Show if the firm is using the cost-minimizing combination of labour and capital and give appropriate advice if necessary.arrow_forwardTrue or false explain this a) In a competitive labor market, the price of labor is determined by the industry that hires the labor. b) In a competitive labor market if the wage is $10.00 than the MRC of labor is $10.00. c) labor and capital can never be substituted for each other. Explain it earlyarrow_forwardExplain how the marginal cost of labor (MCL) curves differ between a firm in a perfectly competitive input market and a firm in a non-perfectly competitive input market, and illustrate on a graph.arrow_forward
- A firm hires labor in a perfectly competitive labor market. Its current profit-maximizing hourly output is 100 units, which the firm sells at a price of $5 per unit. The Marginal Physical product (MPP) of the last unit of labor employed is 5 units per hour. The firm pays each worker an hourly wage of $15. a)What Marginal Revenue (MR) does the firm earn from sale of the output produced by the last worker employed? b)Does this firm sell its output in a perfectly competitive market?arrow_forwardThe Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant. In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.) Labor Input Total Output Marginal Product (Workers per day) (Boxes of paper per day) (Boxes of paper per day) 0 14 235 26 36 44 50 AAAAAA 6 54 Assume that the selling price of paper is $10 per box. If the wage rate is $110.00 per day, Zippy will hire Continue to assume that the selling price of paper is $10 per box. If the wage rate is $90.00 per day, Zippy will hire Assume that the selling price of paper is now $20 per box. workers. workers. If the wage rate remains at $90.00 per day, Zippy will hire workers. Marginal…arrow_forwardConsider a competitive firm in both input and output markets. The production function for this firm is given by q = 10 (KL)^.2. The price of K is $1 and the price of the output is $5. Derive the demand for labor when K is variable.arrow_forward
- Suppose the firm is hiring labor and capital and that the ratio of marginal products of the two inputs equals the ratio of input prices. Does this imply that the firm is maximizing profits? Why or why not?arrow_forwardThe Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant. In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.) Labor Input Total Output Marginal Product Marginal Revenue Product (Workers per day) (Boxes of paper per day) (Boxes of paper per day) Price = $10 Price = $20 (Dollars) (Dollars) 0 0 1 25 2 45 3 60 4 70 5 75 6 77 Assume that the selling price of paper is $10 per box. If the wage rate is $125.00 per day, Zippy will hire ______workers. Continue to assume that the selling…arrow_forwardSuppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If, hiring another worker would increase output by three units per hour, then to maximize profits the firm should not change the number of workers it currently hires. not hire an additional worker. hire another worker. There is not enough information to answer the question.arrow_forward
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