EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 14, Problem 4DQ
To determine
Quantity of resource.
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Students have asked these similar questions
Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm’s capacity. If he adds one more worker, the firm’s total monthly revenue will increase from $50,000 to $58,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. LO16.5 a. What is the marginal product of labor? The marginal product of capital? b. What is the ratio of the marginal product of labor to the price of labor (MPL/PL)? What is the ratio of the marginal product of capital to the price of capital (MPK/PK)? c. Is the firm using the least-costly combination of inputs? d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent?
LO 11.2: I can calculate marginal cost, revenue, and profit and distinguish between marginal cost
and average cost.
Suppose that Patrick's Handmade Puppets has a production cost that is given by
C(x) = 2,000 + 130x – 0.6x2 + 0.002x3 dollars
(0
A firm's production is as follows: Q = 12K2L/3, where L is number
of workers and K is number of machines. The firm spent $100,000
for the 81 machines it owns. The selling price of the output is $300,
and each worker can be hired for $48. What is the firm's maximum
total profit?
O $372,000
O $422,000
O $224,000
O $148,000
Chapter 14 Solutions
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- The following figure shows the revenue and cost curves for a firm X. RM 10 a. b. C. 7 6 LO 5 4 3.5 0 20 25 30 MC 40 AVC AC AR=MR Units If a firm X achieves productivity efficiency, what will be the total revenuel generated At what price will a firm stop operating? Please explain. If the market price is RM4.00, what is the total profit or total loss.arrow_forwardQuestion 19 widget-manufacturing The production function for a firm is given by q = 9K0.5L0.5, where q is the number of widgets produced each hour, K is the number of specialized staplers (which is fixed at 4 in the short run), and L is the number of employees. What is the marginal product of labor at L = 9? O 18 O 3 none of the abovearrow_forwardRefer to the table below. Note that the first column shows variable costs. Quantity Cost Fixed Total Average Average Variable (in dollars) Costs Costs Total Costs Costs (in dollars per 0 1 2 3 4 LO 5 6 0 15 35 60 90 125 160 (in (in (in dollars unit) dollars) dollars) per unit) 40 40 40 40 55 75 37.5 40 100 33.3 40 130 32.5 40 165 33 40 200 33.3 : 15 17.5 20 22.5 25 26.6 Marginal Costs (in dollars per unit) : 15 20 25 30 35 a If the firm produces 5 units that it sells at a price of $30.00 each, what will its profits or losses equal? losses equal $15 profts equal $15 profts equal $25 losses equal $25arrow_forward
- Suppose that marginal product doubled while product price tripled in the table belo Marginal Marginal Product (MP) Units of Total Product Product Price | Total Revenue Revenue Resource (Output) Product $2 $0 1 7 7 2 14 $14 2 13 6. 2 26 12 3 18 2 36 10 4 22 2 44 8 25 50 6 27 2 2 54 4 7 28 1 56 LOarrow_forwardLet's assume that a firm produces 60 products. Its total weekly cost (TC) at this output is $2,100. This includes TVC and TFC. We also know that the firm employs 3 part- time workers at a wage cost of $600 per worker per week. This is the firm's only variable cost (TVC). What is the firm's average fixed cost (AFC) at this output? O $2.50. O $2. O $5. O $100. O $10. Let's assume that a firm's total weekly costs are as follows: 1. Salaries of hired workers $5,000. 2. Supplies = $1,000. 3. Rent = $600, 4. The owners have invested a certain amount of their own money into the business. This could have earned them interest of $200 per week if they had chosen to put it into a bank instead of investing it into their business. 5. The value of the owner's time is estimated to be $800 per week. What are the firm's total economic costs? O $6.000 O $7.600. O $900. $7.500. O $6.700.arrow_forwardFig. A Fig. C 250 $ 200 150 100 50 0 250 150 $ 200 + 100 O 50 0 10 VMP=MRP 4 LS-MFC 10 MRP LS=MFC 10 20 VMP 20 30 40 . 30 50 40 50 HL BL Fig. B Fig. D 250 200 150 100 50 0 250 200 150 100 50 CO 0 $ 0 0 43. Assuming the product price is $2.00, what is the Marginal Physical Product of Labor of the 30th unit of labor? O(a) 15 (b) 25 (c) 30 (d) 35 (e) 60 $ 10 VMP=MRP MRP 10 20 VMP 20 30 40 30 40 LS 50 LS 50 MFC L 1 MFCarrow_forward
- You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. Your economic profit last year was O $50,000 O $60,000 O $10,000 O $30,000arrow_forward7. Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in the figure. What plant size will the firm choose in producing (a) 50, (b) 130, (c) 160, and (d) 250 units of output? Draw the firm's long-run average-cost curve on the diagram and describe this curve. LO9.4 ATC 0 M 150 ATC2 ATC₁ ATC3 80 240arrow_forward3. Consider the production function: Q =4K05L05. If the firm used K = 9 capital and L - 49 labor, how much output, Q. would be produced in the given time period? O 84. O 60. O 21 O None of the other options. O 98.arrow_forward
- Suppose that a business incurred implicit costs of $250,000 and explicit costs of $500,000 in a specific year. If the firm sold 10,000 units of its output at $80 per unit, it's economic profit is O 150,000 O 100,000 300,000 O 50,000arrow_forwardWorkers Pizza Fixed cost in $ per day per day Variable cost in S TC per day 400 per day [25 (75 400 200 6 00 750 850 400 350 450 115 400 145 400 600 lo00 1200 170 400 800 8. Referring to the table above, when the second worker is hired, the marginal cost per pizza is equal to: a) $3 b. $75 750-600 75-25 150 ATC %3D 5u C. $50 d. $150 Duutp Dout 際ATCarrow_forwardThe accompanying table describes the relationship between the number of workers hired by a call center each hour and the number of calls the call center can make each hour. The call center has only 1 telephone. The telephone costs the firm $5/hour (regardless of how many calls are made), and each worker is paid $10 per hour Calls Per Hour 1 2 6 16 O 22 24 What is the total cost of making 2 calls an hour? Multiple Choice O $45 $40 $20 Number of Telephones 1 1 1 1 1 1 $10 Number of Workers Per Hour 2 4 6 8 10 12arrow_forward
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