Answered: Labor Input (workers per day) Total…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The Zippy Paper Company has no control over either the price of paper or the wage it pays its
workers. The following table shows the relationship between the number of workers Zippy hires
and total output: Assuming the selling price is $10 per box, answer the following questions:
a. What is the marginal revenue product (MRP) of each worker?
b. How many workers will Zippy hire if the wage rate is $100 per day?
c. How many workers will Zippy hire if the wage rate is $75 per day?
d. Assume the wage rate is $75 per day and the price of a box of paper is $20. How many
workers will Zippy hire?

Labor Input
(workers per day)
Total Output
(boxes of paper per day)
1
15
2
27
36
4
43
48
51

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