EBK MANAGERIAL ECONOMICS
4th Edition
ISBN: 8220100546624
Author: FROEB
Publisher: YUZU
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Question
Chapter 4, Problem 6MC
To determine
The correct statement about hiring an additional worker.
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Students have asked these similar questions
If the marginal revenue earned by a firm due to an additional unit of worker is less than the marginal cost of hiring him, _____.
a.the firm should not hire the worker
b.the firm should hire the worker
c.the firm should not operate in the long run
d.the firm should not differentiate its products
Jill Pizza restaurant labor is 650 per worker, cost of oven is 800. The workers needed increases as the number of pizzas made increases.
Using the information below:
1. Fill in the remaining columns given the calculations to calculate costs: variable (VC), Marginal (MC), Average Var.(AVC) Average Fixed (AFC)
2. Graph the MC, ATC, AVC, AFC curves (start from Quantity of 200 or your graphs look bad)
3. What is happening to your MC curve over time?
Total Costs (TC), ATC (Average Total Costs),AFC (Average Fixed Costs), AVC(Average Variable Costs), MC (Marginal Costs)
Workers Ovens
0
1
2
3
4
5
6
2
2
2
2
2
2
2
Q of pizzs
0
200
450
550
600
625
640
Fixed
Cost of
Ovens
800
800
800
800
800
800
800
Varriable
Cost of
Workers
0
650
Total
Costs
0
ATC
0
AFC
0
AVC
MC
0
0
You own a small sandwich shop with two employees. They've asked you to consider hiring additional workers for the lunch shift, but you are concerned that doing so may cut into you're profits. Using the table below, calculate the marginal product, value of marginal product, and marginal profit of hiring additional workers.
What action should you take (choose one)
A. Hire two more employees
B. Hit one more employee
C. Fire one employee
D. Do not hire anyone
Chapter 4 Solutions
EBK MANAGERIAL ECONOMICS
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