Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 17, Problem 17.3.4PA
To determine
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I Collado Lumber Company is producing tons of lumber per day. The following table is the costs of production. The managers currently have six machines. The price of output is $5 per unit. The wage of the worker is $55 per worker. From economic theory, we know that the value of the marginal product is price times the marginal product of labor. According to economic theory, a worker should be hired if the value of the marginal product is greater than the marginal cost of hiring a worker.
See the table below.
Number of machines
Number of workers
Output
The marginal product of labor
VMP
Wage
Marginal cost of hiring an additional worker
6
0
0
xxx
xxx
$55.00
xxx
6
1
2
2
$10.00
$55.00
$55.00
6
2
14
12
$60.00
$55.00
$55.00
6
3
30
16
$80.00
$55.00
$55.00
6
4
42
12
$60.00
$55.00
$55.00
6
5
50
8
$40.00
$55.00
$55.00
6
6
56
6
$30.00
$55.00
$55.00
6…
At the local Wendy's franchise, the hourly wage is $9 per worker. The franchise employs 15 workers per hour, and the marginal product of labor is 3 burgers per hour. The price of each burger is $3.50. Is the franchise maximizing profit? If not, would it increase profit by employing more workers or fewer workers? Briefly explain your answer.
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 th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase 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.
Chapter 17 Solutions
Microeconomics (7th Edition)
Ch. 17 - Prob. 17.1.1RQCh. 17 - Prob. 17.1.2RQCh. 17 - Prob. 17.1.3RQCh. 17 - Prob. 17.1.4RQCh. 17 - Prob. 17.1.5PACh. 17 - Prob. 17.1.6PACh. 17 - Prob. 17.1.7PACh. 17 - Prob. 17.1.8PACh. 17 - Prob. 17.1.9PACh. 17 - Prob. 17.2.1RQ
Ch. 17 - Prob. 17.2.2RQCh. 17 - Prob. 17.2.3PACh. 17 - Prob. 17.2.4PACh. 17 - Prob. 17.2.5PACh. 17 - Prob. 17.2.6PACh. 17 - Prob. 17.2.7PACh. 17 - Prob. 17.2.8PACh. 17 - Prob. 17.3.1RQCh. 17 - Prob. 17.3.2RQCh. 17 - Prob. 17.3.3PACh. 17 - Prob. 17.3.4PACh. 17 - Prob. 17.3.5PACh. 17 - Prob. 17.3.6PACh. 17 - Prob. 17.3.7PACh. 17 - Prob. 17.3.8PACh. 17 - Prob. 17.4.1RQCh. 17 - Prob. 17.4.2RQCh. 17 - Prob. 17.4.3RQCh. 17 - Prob. 17.4.4PACh. 17 - Prob. 17.4.5PACh. 17 - Prob. 17.4.6PACh. 17 - Prob. 17.4.7PACh. 17 - Prob. 17.4.8PACh. 17 - Prob. 17.4.9PACh. 17 - Prob. 17.4.10PACh. 17 - Prob. 17.4.11PACh. 17 - Prob. 17.4.12PACh. 17 - Prob. 17.4.13PACh. 17 - Prob. 17.4.14PACh. 17 - Prob. 17.4.15PACh. 17 - Prob. 17.4.16PACh. 17 - Prob. 17.4.17PACh. 17 - Prob. 17.4.18PACh. 17 - Prob. 17.4.19PACh. 17 - Prob. 17.5.1RQCh. 17 - Prob. 17.5.2RQCh. 17 - Prob. 17.5.3PACh. 17 - Prob. 17.5.4PACh. 17 - Prob. 17.5.5PACh. 17 - Prob. 17.5.6PACh. 17 - Prob. 17.5.7PACh. 17 - Prob. 17.6.1RQCh. 17 - Prob. 17.6.2RQCh. 17 - Prob. 17.6.3RQCh. 17 - Prob. 17.6.4PACh. 17 - Prob. 17.6.5PACh. 17 - Prob. 17.6.6PACh. 17 - The total amount of oil in the earth is not...Ch. 17 - Prob. 17.6.8PACh. 17 - Prob. 17.1CTECh. 17 - Prob. 17.2CTECh. 17 - Prob. 17.3CTE
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