Principles of Microeconomics (Second Edition)
2nd Edition
ISBN: 9780393623840
Author: Lee Coppock, Dirk Mateer
Publisher: W. W. Norton & Company
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Question
Chapter 14, Problem 3SP
(a)
To determine
Identify the marginal product and the value of the marginal product that each worker creates.
(b)
To determine
Identify the number of workers should Pam’s pretzels hire.
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Students have asked these similar questions
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 the marginal product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred increase 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.
A small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit?
The firm
A. is not maximizing profit because the marginal revenue product of labor is greater than the wage.
B. is not maximizing profit because the marginal revenue product of labor is less than the wage.
C. is maximizing profit because the marginal product of labor is greater than the wage.
D. is not maximizing profit because the price of the output is not equal to the wage.
E. is not maximizing profit because the marginal product of labor is greater than the wage.
Barb's Bakery employs three workers who
produce 6 cakes per hour. After Barb
hires a fourth worker, production
increases to 12 cake per hour. Which of
the following statements is TRUE?
a.
b.
C.
d.
Because the marginal product
of the fourth worker is greater
than the average product of
three workers, the average
product must rise.
Because the marginal product
of the fourth worker is less
than the average product of
three workers, the average
product must fall
Because the marginal product
of the fourth worker is less
than the average product of
three workers, the average
product must rise.
Because the marginal product
of the fourth worker is greater
than the average product of
three workers, the average
product must fall.
Chapter 14 Solutions
Principles of Microeconomics (Second Edition)
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