Connect Online Access for Essentials of Economics
11th Edition
ISBN: 9781260521269
Author: Bradley Schiller, Karen Gebhardt
Publisher: Mcgraw-hill Higher Education (us)
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Chapter 5, Problem 7QFD
To determine
The reason why Marginal Physical Product decline at a fast food outlet when the number of the hired employees increases. Further to determine the fixed input constraints which limit the productivity of the worker.
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- Use the following table to answer the questions below. Number of chefs Number of pizzas produced per day 1 5 2 25 3 40 4 50 5 55 6 58 7 58 Find the marginal product (MP) for each value of L. The firm is experiencing increasing returns with how many workers? At what number of workers will diminishing marginal returns begin?arrow_forwardYou are an employer seeking to fill a vacant position on an assembly line. Are you more concerned with the average product of labor or the marginal product of labor for the last person hired?arrow_forwardDescribe the difference between a diminishing marginal product of labor and a negative marginalproduct of labor. Why would a profit-maximizing firm always choose to operate where the marginalproduct of labor is decreasing (but not negative)?arrow_forward
- True or false The law of diminishing returns implies that the marginal product of labor (MPL) is increasing as labor input increases.arrow_forwardAssuming the firm is minimizing its cost and the price of labour is $10 per unit and the price of capital is $20 per unit. the marginal product of labour is 50, what must the marginal product of capital be?arrow_forwardWhat is the marginal product of labor? the average output of a unit of labor the total output obtained by using one more unit of labor the average output obtained by using one more unit of labor the extra output obtained by using one more unit of laborarrow_forward
- A firm minimizes its costs by using inputs such that the marginal product of labor is 10 and the marginal product of capital is 20. The price of capital is $10 per unit. What must the price of labor be? (hint: the marginal product per dollar should be equal for both inputs)arrow_forwardPlease Show Each and Every Working VERY CLEARLY! marginal productivityarrow_forwardWhat does diminishing marginal product imply? The marginal cost of an extra worker is unchanged. The marginal cost of an extra worker is less than the previous worker's marginal cost. The marginal product of an extra worker is less than the previous worker's marginal product. The marginal product of an extra worker is greater than the previous worker's marginal product.arrow_forward
- Why does the marginal product of labor start to decrease after a certain number of workers are hired? What makes the difference? a) The variable input continues to increase while the fixed input is fixed. b) Both the variable and the fixed inputs are increasing at the same rate. is it a or b?arrow_forwardThe fast food company Schnabb uses labor and capital to produce its product. Holding the production fixed, what is the effect of a lower price of capital on the ratio between the number of workers and the amount of capital used? Explain using isocosts and an isoquant.arrow_forwarddepending on the stages of production(increasing returns, diminishing returns, negative returns) can a rational firm limitits production within satge I, and explain the relationship between average and marginal product of labour.arrow_forward
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