Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 29, Problem 7E
To determine
To find:
The transfer earnings and the economic rent.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Calculate the Marginal Product (MP) at each input level.
If the price of printer is $100 each, calculate the Value of the Marginal of labor (VMPL).
If the wage rate (per week) is $1800 , how many workers will be employed?
If the firm decides to hire 14 workers, what is the maximum wage the firm would be willing to pay?
The amount of fish caught per week on a trawler is a function of the crew size assigned to operate
the boat. The following table shows the total and marginal products of labor for a trawler.
Crew Size (L)
(No. of
Workers)
Amount of Fish Caught per Week (
Q)
(Hundreds of Lbs)
Marginal Product (
MPL)
(Hundreds of Lbs)
5
15
10
30
15
55
25
80
25
95
15
105
10
110
5
10
110
11
105
-5
12
95
-10
Suppose the owner of the trawler can sell all the fish caught for $75 per 100 pounds and can hire
as many crew members as desired by paying them $1,125 per week. Assuming that the owner of
the trawler is interested in maximizing profits, what is the optimal crew size?
workers
|2 3 4 5 67 8 9을
Question 11
Refer to Figure 1 in Question 11.
The car-repair shop charges $150 per repair. What is the value of the marginal product of the third mechanic? (Enter your answer without a dollar sign)
Knowledge Booster
Similar questions
- What is the marginal cost of producing an additional unit:arrow_forwardCalculate the size of the workforce needed for the companyto meet average weekly demand.arrow_forwardA carpenter quits his job at a furniture factory to open his own cabinetmaking business. In his first two years of operation, his sales average $100 000 per year and his operating costs for wood, workshop and tool rental, utilities, and miscellaneous expenses average $70 000 per year. Now his old job at the furniture factory is again available. What is the lowest wage at which he should decide to return to his old job? Why?arrow_forward
- The marginal product of a machine is 10 units of output per hour. The marginal product of labor is 6 units of output per hour. The rental rate of a machine is $4 per hour The hourly wage rate is $3 Is this firm minimizing its cost? Explain why or why not, and if not, which input should they switch towards and why?arrow_forwardThe marginal resource cost of a resource measures the extra cost incurred by one more unit of the resources hired. true or falsearrow_forwardQuestion 2 A snowboard company currently hires 10 skilled employees who are paid a weekly wage of $1,000.00. the cost of capital is $3000 and it is fixed, which means that it does not vary with output. The company is currently producing 240 snowboards. The company’s cost will be $13,500 if it produces an additional snowboard. A customer is willing to pay $550 for the 241st snowboard. Should the company produce and sell it? Timothy quits his job which pays $84000 a year, to enrol in a 2-year graduate programme. His annual school expenses are $58000 for tuition, $9500 for books and 3600 for food. What is his opportunity cost of attending the graduate program? A motor vehicle assembly plant requires the use of both capital and labour. the telsa manufacturing plant is considering increasing the number of workers to increase production. Does diminishing returns hold in this scenario yes/no? explain. Explain how each of the following situations would affect…arrow_forward
- A manufacturing company leases a machine for $31,000 per year. Each unit produced costs $36 in labor and $65 in materials. To break even, 21,000 units must be sold. What is the price of the product?arrow_forwardXYZ Services uses four(4) word processors and two(2) two typewriters to produce reports.The marginal product of a typewriter is 50 pages per day and the marginal product of aword processor is 500 pages per day.The rental price of a typewriter is GHS1 per day,whereas the rental price of a word processor is GHS 50 per day.Is Temporary services utilizing typewriters and word processors in a cost-minimizing manner?Explain.arrow_forwardA farm is currently able to produce 10000 bushels of peanuts per season on 10 acres. Assume it adds on more acre and now is able to increase its total production to 12000 bushels of peanuts in the growing season. Determine the marginal product of the additional acre of land for this farm.arrow_forward
- Temporary Services uses four word processors and two typewriters to produce reports. The marginal product of a typewriter is 50 pages per day, and the marginal product of a word processor is 500 pages per day. The rental price of a typewriter is $1 per day, whereas the rental price of a word processor is $50 per day. Is Temporary Services utilizing typewriters and word processors in a cost-minimizing manner?arrow_forwardA decrease in the wage rate will cause a firm’s marginal cost curve to shift down. True or False and explain why. Include graphs when needed.arrow_forwarda software production firm, average product has started falling and total output indicated diminishing trend. The production manager Mr. Yahya called you and asked you to see the condition of marginal product. You analyzed the situation and reported that marginal product falling more than average product. Mr. Yahya got surprised. In your opinion which situation the firm is heading to?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning