The table below contains the production information of a company. In the table, the first column shows the firm's use of capital and the first row shows the firm's use of labor. The other figures in the table show the company's production amounts. For example, if the firm employs 200 units of capital and 150 units of labor, it can produce 3180 units of product. Labor Amount Amount of Capital 100 worker 150 worker 200 worker 250 worker 100 2200 2950 3450 3700 150 2300 3070 3585 3840 200 2390 3180 3700 3970 250 2470 3280 3810 3990 a) What is the marginal product of the workforce when the amount of capital used by the firm is fixed at 150 units and increases the labor force employment from 150 to 200 workers? b) Suppose the firm increases its capital usage from 150 units to 200 units. In (a) you have calculated the marginal product of the labor force when the capital is 150 units, when the firm increases the amount of labor from 150 to 200 workers. What is the marginal product of the workforce when the employment of the firm increases from 150 to 200 workers while the capital usage is 200 units? c) Draw the marginal product curve by calculating how the marginal product of the workforce will follow when the firm gradually increases its workforce usage from zero to 250 (for example, from 0 to 100, from 100 to 150 etc.) while the amount of capital usage of the firm is fixed at 200 units.
The table below contains the production information of a company. In the table, the first column shows the firm's use of capital and the first row shows the firm's use of labor. The other figures in the table show the company's production amounts. For example, if the firm employs 200 units of capital and 150 units of labor, it can produce 3180 units of product. Labor Amount Amount of Capital 100 worker 150 worker 200 worker 250 worker 100 2200 2950 3450 3700 150 2300 3070 3585 3840 200 2390 3180 3700 3970 250 2470 3280 3810 3990 a) What is the marginal product of the workforce when the amount of capital used by the firm is fixed at 150 units and increases the labor force employment from 150 to 200 workers? b) Suppose the firm increases its capital usage from 150 units to 200 units. In (a) you have calculated the marginal product of the labor force when the capital is 150 units, when the firm increases the amount of labor from 150 to 200 workers. What is the marginal product of the workforce when the employment of the firm increases from 150 to 200 workers while the capital usage is 200 units? c) Draw the marginal product curve by calculating how the marginal product of the workforce will follow when the firm gradually increases its workforce usage from zero to 250 (for example, from 0 to 100, from 100 to 150 etc.) while the amount of capital usage of the firm is fixed at 200 units.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:QUESTION 5)
The table below contains the production information of a company. In the table, the first column
shows the firm's use of capital and the first row shows the firm's use of labor. The other figures in the
table show the company's production amounts. For example, if the firm employs 200 units of capital
and 150 units of labor, it can produce 3180 units of product.
Labor Amount
Amount of Capital
100 worker
150 worker
200 worker
250 worker
100
2200
2950
3450
3700
150
2300
3070
3585
3840
200
2390
3180
3700
3970
250
2470
3280
3810
3990
a) What is the marginal product of the workforce when the amount of capital used by the firm is
fixed at 150 units and increases the labor force employment from 150 to 200 workers?
b) Suppose the firm increases its capital usage from 150 units to 200 units. In (a) you have calculated
the marginal product of the labor force when the capital is 150 units, when the firm increases the
amount of labor from 150 to 200 workers. What is the marginal product of the workforce when the
employment of the firm increases from 150 to 200 workers while the capital usage is 200 units?
c) Draw the marginal product curve by calculating how the marginal product of the workforce will
follow when the firm gradually increases its workforce usage from zero to 250 (for example, from 0
to 100, from 100 to 150 etc.) while the amount of capital usage of the firm is fixed at 200 units.
d) If the firm employs labor from a competitive market at 50 TL per unit of labor, and sells its product
at 4 lira per unit in the competitive market, draw the firm's marginal product revenue curve.
e) What is the real wage of the workforce under the conditions in (d)?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education