#2. The relationship between output and the quantity of labor employed for one f
ID: 1201347 • Letter: #
Question
#2. The relationship between output and the quantity of labor employed for one firm is shown below (given an amount of the fixed inputs and a production technology).
No. of Workers Hourly Output
27 270
28 279
29 287
30 293
31 298
2i. The marginal product of the 30th worker is
a. 0
b. 1
c. 6
d. 293
e. It cannot be determined.
2.ii Suppose the price of the product is $5. The marginal revenue product of the 30th worker is
a. $5
b. $6
c. $30
d. $1,465
e. It cannot be determined.
2iii. Suppose this firm operates in perfectly competitive markets, and the market wage rate is $32 per worker per hour. How many workers does the following perfectly competitive firm want to hire to maximize profits?
a. 27
b. 28
c. 29
d. 30
e. 31
Explanation / Answer
The marginal product of the 30th worker is 293-287 =6
Suppose the price of the product is $5. The marginal revenue product of the 30th worker is 1465-1435 = 30
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