Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 29, Problem 7E
To determine
To find:
The transfer earnings and the economic rent.
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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
Widget 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?
Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for
$1.00.
The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour.
Hours of Labor
Output
0
0
1
50
2
90
3
120
4
140
5
150
6
155
7
157
The marginal product of labor for the
third
hour of labor is
...????.
(Enter
your response as an
integer.)
The value of the marginal product of labor for the
third
hour of labor is
......???.
(Round
your response to two decimal
places.)
If the wage paid to workers in Die Cast's plant is $25/hour, it should employ
......???
worker(s).
(Enter
your response as an
integer.)
If the wage paid to workers in Die Cast's plant is $35/hour, it should employ
......????
worker(s).
(Enter
your response as an
integer.)
If…
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Similar questions
- What are the factor payments for land, labor, and capital?arrow_forwardState whether the following is true or false Pure economic rent occurs when the opportunity cost of a resource is zero and there is a positive price for that resources in the marketarrow_forwardThe 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.arrow_forward
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