Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 16, Problem 2P
To determine
Marginal revenue product.
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When a par ar firm is fully utilizing its capital, its output is given by Y = 10 × LO5. The cost of labour is OMR1 per
unit. To maximize profit, how many units of labour should this firm use?
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O b. 100
О с. 5
O d. 25
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. Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople’s productivity. Currently, each salesperson sells an average of one car per day while being paid $20 per hour for an eight-hour day. LO17.8
What is the current labor cost per car sold?
Suppose that when the dealer raises the price of labor to $30 per hour the average number of cars sold by a salesperson increases to two per day. What is now the labor cost per car sold? By how much is it higher or lower than it was before? Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased?
Suppose that if the wage is raised a second time to $40 per hour the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold?
If the firm’s goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $20 per hour, $30 per hour, or $40 per hour?…
Suppose that marginal product doubled while product price tripled in the table belo
Marginal
Marginal
Product (MP)
Units of
Total Product
Product Price | Total Revenue
Revenue
Resource
(Output)
Product
$2
$0
1
7
7
2
14
$14
2
13
6.
2
26
12
3
18
2
36
10
4
22
2
44
8
25
50
6
27
2
2
54
4
7
28
1
56
LO
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- The following labor market graph applies to questions 13-16. Consider the following competitive labor market situation before and after a tax is levied on labor suppliers. (This would be as if the companies did not withhold any taxes from workers' paychecks. The workers would always be the ones mailing in any taxes owed on their pay from the firms.) W wd Wo Ws Imp E L L₁ Lo D(no tax) D. (with tax) L 13. Before the tax is imposed, firms' surplus is given by the area A + B + C. This surplus measures O the workers' addition to profit. O how much the firm is paying the workers. O how much more the workers are getting paid compared the combined minima the workers are willing to work for. O the firms' combined revenues. O the size of the wage.arrow_forwardYou said that "this may result in a steeper AS curve due to the fact that firms can produce more output for a given price level.". However, I think that steeper AS without the change of y-intercept(shift) will have opposite effect. I drew a diagram to compare different As curves with same y intercept and different slopes. It is clear that for same level; of price level, steeper AS has loer output (Y2) than faltter AS (Y1), could u please explain it for me? Thanks a lot :)arrow_forwardThe following figure shows the revenue and cost curves for a firm X. RM 10 a. b. C. 7 6 LO 5 4 3.5 0 20 25 30 MC 40 AVC AC AR=MR Units If a firm X achieves productivity efficiency, what will be the total revenuel generated At what price will a firm stop operating? Please explain. If the market price is RM4.00, what is the total profit or total loss.arrow_forward
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