Microeconomics: Principles & Policy
14th Edition
ISBN: 9781337794992
Author: William J. Baumol, Alan S. Blinder, John L. Solow
Publisher: Cengage Learning
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Use the graph to answer the question that follows.
Based on the chart above, if the product sells at a price of $10 per unit, what is the marginal revenue product of the seventh unit of labor?
0
$6.50
About $5
About $25
Indeterminate
The following table shows the number of pizzas that can be produced by a large pizza parlor employing various numbers of pizza chefs.
Number of Chefs Number of Pizzas per Day
1 40
2 64
3 82
4 92
5 100
6 92
Find the marginal physical product schedule of the pizza chefs.
Assuming a price of $9 per pizza, find the marginal revenue product schedule.
If chefs are paid $100 per day, how many chefs will this pizza parlor employ? How would your answer…
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.
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- 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 $10. What amount of labor force should be hired? Explain!arrow_forwardSuppose the following table gives the quantity of labor, offered wage, and marginal revenue product of labor for Company X. Labor (hours) Wage ($/hour) MRP 16 12 - 17 18 170 18 24 154 19 30 138 20 36 122 What can the firm do to increase profits?arrow_forwardYou are given the following table by one of your analysts. Provide the profit maximizing point and explain how you would determine how much labor you will need to maximize profits.arrow_forward
- Based on the table for a perfectly competitive firm above, if the wage rate for labor is $15, how many units of labor should the firm hire?arrow_forwardWidget factory Inc. in Wisconsin has the following production function: F(L,K)=2L L represents the number of labours hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at$25/ hour.since this is a competitive market, the factory output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many workers would widget factory Inc employ? What is their profit rate?arrow_forwardComplete the following statement about the marginal productivity theory. For a firm that is a factor price taker, _____ , And firms hire the factor quantity at which _____. Thus, it follows that _____. Suppose that Manuel works for Clear Drop Co, a perfectly competitive firm producing water filters. Manuel was paid $3,000 but found a better job and quit Clear Drop. Since nothing else changed, Clear Drop's total revenue _____. Blank 1: a. MFC = P b. MFC = 0 c. MFC < P d. MFC > P Blank 2: a. MRP = MFC b. MRP = 0 c. MRP < MFC d. MRP > MFC Blank 3: a. W = MRP b. W < MRP c. W > MRP Blank 4: a. does not change as well b. falls by $1,500 c. falls by $3,000 d. rises by $1,500 e. rises by $3,000arrow_forward
- Widget factory Inc. in Wisconsin has the following production function: F(L,K) = 2L1/2 K1/2 L represent the number of labour hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at $25/hour. Since this is a competitive market, the factory output the factory gets per is output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many factory workers would Widget Factory Inc employ? What is their profit rate?arrow_forwardQUESTION 15 Answer this question based on the information in the table:If hiring the 6th worker increases total product by 7 units and the price of each unit is $2, which of the following is true? Number of Workers Total Cost 0 50 1 110 2 160 3 200 4 240 5 250 6 260 7 280 8 310 9 350 10 400 The firm should not hire the 6th worker as MR<MC. Marginal revenue equals $2. The firm should hire the 6th worker as MR>MC. The firm should not hire the 6th worker as MR<TC.arrow_forwardA pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 5 Pizzas per night 20 36 48 56 60 HINT: In the following, you will be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. a) Draw the production function as number of pizzas per night depending on the number of workers employed. b) Briefly describe the shape of your production function and explain the reasons for this shape. c) Draw the total cost…arrow_forward
- Suppose a competitive firm can sell its output for $7 per unit. The following table gives the firm’s short run production function. Labor Output 0 0 1 15 2 40 3 70 4 86 5 94 6 98 In the table below, you will determine several points on the firm’s demand curve for labor. To do this, you must determine how many workers the firm should hire for different values of the wage rate in order to maximize profit. Complete the table below: Wage Rate Per Worker Quantity Demanded of Workers $30 $50 $70 $100 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardSuppose a competitive firm can sell its output for $7 per unit. The following table gives the firm’s short run production function. Labor Output 0 0 1 15 2 40 3 70 4 86 5 94 6 98 In the table below, you will determine several points on the firm’s demand curve for labor. To do this, you must determine how many workers the firm should hire for different values of the wage rate in order to maximize profit. Complete the table below: Wage Rate Per Worker Quantity Demanded of Workers $30 $50 $70 $100 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure. do not upload imagesarrow_forwardSuppose firms A and B each make T-shirts. Firm A's production function is q = L0.5 K0.5. Firm B's production function is q = 1.2* L0.5 K0.5. If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.arrow_forward
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