Use the following information to answer the next 3The table below shows a competitive firm's short-run productionfunction. Labor is the firm's only variable input, and the market price is$2 per unit.Units of Labor34567Units of Output370490570600620How much does the fifth unit of labor add to the firm's total revenue?If the wage rate is $200, how many units of labor will the firm employ?If the wage rate is $200, the firm should

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Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 1P

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Are there fixed costs in the lung-run? Explain briefly.
A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
Coldbox Corporation hires its workers in a perfectly competitive labor market and produces and sells frozen peas in a perfectly competitive product market. The market price for frozen peas is $4 per bag. The table below shows Coldbox' short-run production of frozen peas. Labor is the only variable input. Coldbox Corporation's fixed cost is $500. Number of Workers Bags of frozen peas 0 0 1 60 2 140 3 250 4 320 5 380 6 400 a) If the wage is $200 per worker, identify the profit-maximizing number of workers for Coldbox. Explain using marginal analysis. b) If the price of frozen peas decreases by $2 per bag, would the number of workers hired by Coldbox be more than, less than, or equal to the number of workers you identified in part (a) ? Explain. c) Suppose that Coldbox hires workers from a monopsonistic labor market. Would the wage be higher, lower, or equal to the equilibrium wage in a perfectly competitive market? Explain.
QUESTION 9 A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $1 a bushel, the wage rate is $12, the farmer employs six workers and the marginal product of the sixth worker is 10. What would you advise this farmer to do? O Increase employment because the wage paid is less than the marginal revenue product. O Reduce employment because the wage paid is greater than the marginal revenue product. O Do nothing because the wage rate and the marginal product of the last worker hired are equal. O Reduce the product price so that the wage and marginal revenue product will be equal.
Billy is renting trucks that will be used to install solar panels. The table below presents the marginal product (in terms of solar panels installed per week) of various trucks. Assume this is a perfectly competitive market. a. What is the marginal revenue product of each truck if the current market price to install one solar panel is $50? What if the current market price is $100? $150? Using the table below, fill in the “Marginal Revenue Product” columns for each price. Labor Productivity and Marginal Revenue Product for Solar Panel Installers Capital (trucks) Marginal Product (solar panels) Marginal Revenue Product for P = $50 (dollars) Marginal Revenue Product for P = $100 (dollars) Marginal Revenue Product for P = $150 (dollars) 1 24 2 21 3 18 4 15 5 12 6 9 b. Suppose the cost to rent a truck is $900. How many trucks will be rented in the price of a solar panel is $50? trucks How many trucks will be…
Use the table below to calculate the accounting and economic profit for Abner's Apple Art. Item Amount Total revenue $250 Costs Apples $30 Utilities $20 Lease $21 Abner's forgone wages $80 Numbers in the table are in thousands What is Abner's Apple Art's accounting profit? Accounting profit = $ thousand What is Abner's Apple Art's economic profit? Economic profit = $ thousand
bo Use the table below to calculate the accounting and economic profit for Abner's Apple Art. Item Macmillan Learning Total revenue Costs Apples Utilities Lease Abner's forgone wages Numbers in the table are in thousands What is Abner's Apple Art's accounting profit? What is Abner's Apple Art's economic profit? Amount $220 $30 $20 $20 $70 Accounting profit = $ Economic profit = $ thousand thousand
suppose Fred produces 500 litres of milk every day with 10 workers. the price of milk is $12 per litre, and each worker is paid $550 daily. if th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.
Che Farty Decent Industries has the following production schedule. The price of the product being produced is $5 in a purely competitive market On the following table, compute the Marginal Revenue Product for every "jump" between one level of workers and the next. Instructions: Enter your answers as whole numbers. Marginal Product Marginal Revenue Product Workers Output/Hour 0. 5. 20 4 20 Eces 10 35 15 45 The hourly wage for workers is $16. Assuming workers must be hired in increments as shown on the table, Fairly Decent Industries will keep hiring workers until it has workers, but no more. Prev 2 3 4 of 4 Next > e here to search %24
5 föt the factors of production be labor and capital equipment. A competitive firm is facing the following input prices: the wage rate is wi = $8 per hour and the rental rate of capital is w2 = $16 per hour. At the current input mix the marginal product of labor is 24 and that of capital is 32. Should the firm change its input mix? Why?
The table below shows data for the production of Avocados for an individual firm operating in an imperfectly competitive market. Number of workers Number of Avocados Marginal Revenue 0 0 22 10 150 21 20 270 20 30 360 19 40 420 18 50 450 17 Given this data, complete the table: Quantity of Avocados Marginal Product of Labor (MPL) Marginal Revenue Product of Labor (MRPL) 0 - - 10 20 30 40 50
56 48 40 32 24 16 0 - Total Cost is $ 2400 4800 7200 The graph shows the short-run cost curves for a firm in a perfectly competitive market. The firm's only variable input is labour and the wage rate is $36. If market price is $48: - profit-maximizing level of output is - Total Fixed Cost is $ - for the profit maximizing output the firm should hire - the firm's profit is $ If market price is $16: - profit-maximizing level of output is 9600 - the firm's profit is $ SMC ATC units of labour. AVC

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