PQ 19.09 (and PQ 19.06) At a fish farm, which is operating in a perfectly competitive market, Kendall, the owner of this farm pays their workers $120 per day. There are 7 workers employed by Kendall. At their current level of production, the marginal product of the seventh worker is 8 kilograms of fish per day, and the marginal product of the eight worker would be 7 kilograms of fish per day. The market price of fish is $22 per kilogram. If Kendall wants to maximize profit they will Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a hire more workers. b. hire less workers. not change the amount of workers.
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- Question 3 Mr. Stonewall has to set up a firm that produces calculators competing with the likes of Casio and Sharp calculators. In order for to estimate the amount of labour and capital needed to maximise profit in the long run, Mr. Stonewall has employed you to help him in this regard. Currently, the competitive wage rate is set at ¢4 per unit of labour and capital is rented at ¢5 per unit. The forces of demand and supply in the industry has also set the equilibrium price of calculators at ¢0.8 per unit. Suppose the production function of Mr. Stonewall's firm is given as Q 20K0.5 LO.5 + 7.5 and the firm total cost of production is ¢1690. Find the optimal levels of capital and labour needed to optimize output. The maximum profit of the firm at the optimal levels of labour and capital. 11.A manufacturer of toys is employing 50 workers and using 15 pieces of equipment to assemble toys. Currently, the marginal product of labor is 5 $ and the marginal product of capital is 25 S. Assume the market prices for labor and capital are $12 and $20, respectively Is this firm maximizing its profit? A)Yes B)No What should this firm do with respect to its employees and its use of equipment? The firm should (1)_ the number of employees and (2)_its use of equipment. (1) A)Maintain B)Reduce C) Increase (2) A)Maintain B)Reduce C)IncreaseSuppose that you are one of rubber producers (sellers) in the perfectly competitive market in Thailand. Make it simple: suppose there are two types of used inputs consisting of land and workers. Assume that, in short-run production, you operate on a fixed size of a land and the cost of renting the land is 2 Baht per day. The table (A) below shows the relationship between the quantity of rubber produced by your company per day and costs of workers per day. The goal of your firm is to maximize (minimize) profits (losses).Table (A) The Quantity of rubber (units) produced per day Costs of workers per day in baht ATC AVC MC 0 0 1 5 2 9 3 12 4 14 5 15 6 18 7 22 8 27 9 33 10 40 Answer the following questions 1. Filling in Table (A) above for ATC, AVC and MC from 0 to 10 units. 2. Using economics analysis, suppose the market price of the rubber in Thailand is 3.5 Baht per unit, how…
- Consider that Ah Cy is a retail firm that produces and sells fashion accessories including crocheted bracelets. Ah Cy is one of many firms participating in a highly competitive national market for crocheted bracelets. The market price for crocheted bracelet is $18.20 and the market is in equilibrium. Firms in the market and potential entrants have the same cost structure, and the current market quantity is 48,280 bracelets. At Ah Cy, the cost of labor and materials used in production is described by the equations: MC = 4 + 0.05g and AVC = 4 + 0.025q. In addition to these costs, the firm faces a cost of $4,840 for its machinery and equipment. (NOT FOR SALE • DO NOT COPY) (Question 7 of 8) Now consider that higher input prices led to a decrease in the supply of leather bracelets, a substitute consumption good. In the market for leather bracelets, the market price, and quantity of leather bracelets traded changes, and this impacts the competitive market for crocheted bracelets. As a…Musashi Cutter runs a surfing school on the North Shore of Oahu. He has two inputs: surfboards, which he rents from a local shop for $10 per day, and surfing instructors, whom he hires for $40 per day. Musashi has figured out that the marginal revenue product (MRP) of the last instructor hired is $400, and the MRP of the last board used is $300. Which of the following statements is correct? - Musashi will optimize his input combination if he employs more instructors and uses fewer surfboards - Musashi will optimize his input combination if he employs fewer instructors and use more surfboards - Musashi currently employs the optimal combination of surfboards and instructorsTable 14-7 A firm in a competitive market has the following cost structure: Quantity Total Cost (Units) (Dollars) 5 1 10 2 12 3 15 4 24 5 40 Refer to Table 14-7. If the market price is $16, this firm will produce 4 units of output in the short run and exit in the long run. produce 5 units of output in the short run and face competition from new market entrants in the long run. produce 5 units of output in the short run and exit in the long run. shut down in the short run and exit in the long run.
- 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 50Question 2. (20) 1. 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?Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm's capacity. If he adds one more worker, the firm's total monthly revenue will increase from $52,000 to $70,000. If he adds one more tractor, monthly revenue will increase from $52,000 to $64,000. Each additional worker costs $6,000 per month, while an additional tractor would also cost $6,000 per month. Instructions: Enter your answers as a whole number. a. What is the marginal revenue product of labor? The marginal revenue product of capital? b. What is the ratio of the marginal revenue product of labor to the price of labor (MRP /PL)? What is the ratio of the marginal revenue product of capital to the price of capital (MRP OPd? %24
- You are economic consultant for Jack, who farms raw cotton in a perfectly competitive market. One day he gives you the following data at his present level of production: Output = 2000 pounds, market price = $5.00, total cost =$8000, fixed cost=$2000, marginal cost=$5. The minimum of AVC occurs at {1000 pounds at $2} and the minimum of ATC at {1500 pounds at $3.5}. Please help Jack with the following questions based on the above figures: Draw a graph for the raw cotton market and a graph for Jack’s farm current situation that includes MC, ATC, and AVC, labeling all relevant points on axes with numerical values. Is Jack maximizing the profit (minimizing the loss)? Why or why not? Label the total profit/loss area. Suppose more farmers enter the raw cotton market until the market price is $3.00 per pound. On the same graphs, show the effect of this change in the market place. Would you like to suggest Jack leaving the market in the short run? Explain your answer.Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm's capacity. If he adds one more worker, the firm's total monthly revenue will increase from $50,000 to $62,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $68,000. Each additional worker costs $6,000 per month, while an additional tractor would also cost $6,000 per month. Instructions: Enter your answers as a whole number. a. What is the marginal revenue product of labor? The marginal revenue product of capital? b. What is the ratio of the marginal revenue product of labor to the price of labor (MRP ✓ ÷ PL)? What is the ratio of the marginal revenue product of capital to the price of capital (MRP C÷ PC)? c. Is the firm using the least-costly combination of inputs? (Click to select) = d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent? (Click to select)Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm’s capacity. If he adds one more worker, the firm’s total monthly revenue will increase from $50,000 to $62,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $58,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. Instructions: Enter your answers as a whole number. a. What is the marginal revenue product of labor? $ The marginal revenue product of capital? $ b. What is the ratio of the marginal revenue product of labor to the price of labor (MRPL/PL)? : What is the ratio of the marginal revenue product of capital to the price of capital (MRPC/PC)? :