Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 3PA
Subpart (a):
To determine
Calculate marginal product of labor.
Subpart (b):
To determine
Calculate value of marginal product of labor.
Subpart (c):
To determine
Demand and equilibrium price of an apple.
Subpart (d):
To determine
Demand and equilibrium price of an apple.
Subpart (e):
To determine
Demand and equilibrium price of an apple.
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Suppose that labor is the only input used by a perfectly competitive firm. The firm’s production function is as follows: Number of Workers: 0, 1, 2, 3, 4, 5, 6, 7 Units of Output: 0, 7, 13, 19, 25, 28, 29, 29 a. Calculate the marginal product for each additional worker. b. Each unit of output sells for $10. Calculate the value of the marginal product of each worker. c. Compute the marginal profit if the wage is $100 a day.
2. Your enterprising uncle opens a sandwich shop that employs 7 people. The employees are paid $12 per hour, and a sandwich sells for $6. If your uncle is maximizing his profit, what is the value of the marginal product of the last worker he hired? What is that worker’s marginal product?
Suppose that labor is the only input used by a perfectly competitive firm.The firm's production function is as follows:a.Calculate the marginal product for each additional worker.b.Each unit of output sells for $10.Calculate the marginal product for each additional worker.cCompute the demand for schedule showing the number of workers hired.
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.
Chapter 18 Solutions
Principles of Microeconomics (MindTap Course List)
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