Question

The following table depicts the number of grapes that can be picked in an hour with varying amounts of labor. Assuming that the price of grapes is $250 per flat, calculate total revenue and marginal revenue product (MRP) and answer one question about hiring. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers, Number of Pickers Output of Grapes (per hour) (in flats) Total Revenue Marginal Revenue Product ($ per hour) (s per hour) How many pickers will be hired if the going wage rate is $7.50 per hour?

Answer 1

Ans:

Number of Pickers ( per hour)	Output of Grapes ( in flats)	Total Revenue ( $ per hour)	Marginal Revenue Product ( $ per hour)
0	0	0	--
1	10	25	25
2	28	70	45
3	43	107.50	37.5
4	54	135	27.5
5	61	152.50	17.5
6	64	160	7.5
7	65	162.50	2.5
8	61	152.50	-10

Explanation:

Total revenue = Price * Quantity

Marginal revenue product ( MRP) = Marginal product * Marginal revenue

Ans: 6 pickers will be hired if the going wage rate is $7.50

Explanation:

Profit maximization condition is where wage rate equals marginal revenue product ( Wage rate = MRP)