In the short run, a tool manufacturer has a fixed amount of capital with labor as its primary variable input. The cost structure of the company is shown in the downloaded worksheet. (a) Calculate marginal product and marginal revenue product if the price of the product produced is $10. Put those numbers in columns 3 and columns 4 respectively. (b) Wage rate per unit for 10 units of labor is $ 12; for 11 units of labor is $13; for 12 units of labor is $ 14; for 13 units of labor is $15; for 14 units of labor is $ 16; for 15 units of labor is $17. Put these wage values in column 5 of the worksheet. (c) Calculate total labor cost and marginal resource cost and put those values in column 6 and column 7, respectively. (d) What is the difference between MRP and MRC for 12 units of labor? (enter answer here)
In the short run, a tool manufacturer has a fixed amount of capital with labor as its primary variable input. The cost structure of the company is shown in the downloaded worksheet. (a) Calculate marginal product and marginal revenue product if the price of the product produced is $10. Put those numbers in columns 3 and columns 4 respectively. (b) Wage rate per unit for 10 units of labor is $ 12; for 11 units of labor is $13; for 12 units of labor is $ 14; for 13 units of labor is $15; for 14 units of labor is $ 16; for 15 units of labor is $17. Put these wage values in column 5 of the worksheet. (c) Calculate total labor cost and marginal resource cost and put those values in column 6 and column 7, respectively. (d) What is the difference between MRP and MRC for 12 units of labor? (enter answer here)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:In the short run, a tool manufacturer has a fixed amount of capital with labor as its primary variable input.
The cost structure of the company is shown in the downloaded worksheet.
(a) Calculate marginal product and marginal revenue product if the price of the product produced is $10.
Put those numbers in columns 3 and columns 4 respectively.
(b) Wage rate per unit for 10 units of labor is $ 12 ; for 11 units of labor is $13; for 12 units of labor is $ 14;
for 13 units of labor is $15; for 14 units of labor is $ 16; for 15 units of labor is $17. Put these wage values
in column 5 of the worksheet.
(c) Calculate total labor cost and marginal resource cost and put those values in column 6 and column 7,
respectively.
(d) What is the difference between MRP and MRC for 12 units of labor? (enter answer here)
Transcribed Image Text:Calculate and complete columns (3), (4), (5), (6) and (7) as instructed by quiz question # 8.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Quantity of
Total
Labor
Product
10
50
11
54
12
60
13
64
14
66
15
67
Use this area for calculations if needed and to answer Q10
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