Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421315
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 12, Problem 2.2P
(a)
To determine
The number of workers hired.
(b)
To determine
The number of workers hired.
(c)
To determine
The number of workers hired.
(d)
To determine
The allocation of resources.
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We R' Write is really worried about their production line for pens. The company is concerned that they are employing more workers on the production line than necessary. We R' Write has provided you with the production information for pens in the table below that corresponds to different numbers of workers on the production line.
Describe where the law of diminishing marginal productivity begins for We R' Write.
We R' Write currently uses 75 workers on the production line per day. Given the calculations in the table, is this number optimal? Why, or why not?
If you could make a suggestion regarding the optimal number of workers We R' Write should use on the production line, what would it be? Why?
Number of
Workers per
Day
Pens
Produced per
Day
Average
Product
Marginal
Product
Price per Pen
Total
Value
Product
Average
Value
Product
Marginal
Value
Product
Price of
Worker per
Day
0
0
---
---
$3.50
$0.00
---
---
$560
15
1,000
66.67…
Brian uses wool (K) and labour (L) to produce t-shirts (q).
The production function is: q = min{1/3L, 2K}. The inputs are perfect complement.If he uses 0.5 kg of wool and 3 hours of labour, he can produce 1 t-shirt.
The pice of wage per hour is given by w=$10 and the price of each kg of wool is given by r=$4. What is the long run total cost function, C(q)? Sketch it on the diagram.
Consider the following production function for shirts: q = v6 L3/4K/4, where L is worker-hours, and K is sewing
machine-hours.
a. Compute the marginal products of labor and capital, the average product of labor, and the marginal rate of
technical substitution of labor for capital (i.e. how many units of capital are needed to make up for the loss
of one unit of labor)?
b. Are there diminishing returns to labor (that is, does the marginal product of labor decrease when labor L
increases)? What about to capital?
Is there diminishing marginal rate of technical substitution (MRTS)?
с.
Chapter 12 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
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