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 17, Problem 10DQ
To determine
The decision-making process.
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Historians have been able to find out how the relationship between wage
levels and capital costs developed in England and France from the early
1600s until the first part of the 1800s. What does not characterize this
development?
Wage levels relative to capital costs fell in the early 1600s in France and never
rebounded to the same level in the period up to 1820
O
After about 1700, England experienced a long period of steadily higher wages
relative to capital costs.
O
Since the two countries are so close to each other, the development is exactly
the same in the two countries.
Compared to France, labour in England was much more expensive relative to
capital at the start of the Industrial Revolution.
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 $54,000 to $72,000. If he adds one more tractor, monthly revenue will
increase from $54,000 to $66,000. 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 (MRPL/P)?
What is the ratio of the marginal revenue product of capital to the price of capital (MRP /P d?
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?
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Chapter 17 Solutions
Microeconomics
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 1ARQCh. 17.A - Prob. 2ARQ
Ch. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
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