Homework Answers
2.
A.
B.
From the above table, it can be Observed that marginal product of labor is decreasing with each additional hours. It shows that diminishing return of labor in the production process. For example, first hour of labor, produces 6 units of product, but second hour of labor, produces 5 units of product and third hour of labor produces 4 units of product and so on... It shows that with each new hour of work, production level decreases. It shows that there is a diminishing return of labor.
C.
Optimal level of labor is applied, when MRAP of labor = wage rate of the labor
On the basis of above rule,
Optimal level of labor = 5 hours
Because, at 5th hour of labor,
MRAP of labor = 2*20 = $40
Wage of the labor = $40
So, optimal level of labor is achieved when work is done for 5 hours.
========
Pl. repost other unanswered questions for their proper answers!
Add Answer to:
2. You are given the following information: Hours of labor Units of output Marginal product 15...
QUESTION 5 The marginal product for labor is given (MP) = 3 – 0.02*L; price of...
QUESTION 5 The marginal product for labor is given (MP) = 3 – 0.02*L; price of the product is $100 and wage = 200. Based on information above, the marginal product of labor at the optimal level of employment is $3 $2 $1.5 $1 2 points QUESTION 6 If the labor elasticity of output is 0.5 and the capital elasticity of output is 0.9, then the production function exhibits constant returns to scale. economies of scale. diseconomies of scale. diminishing...
12. Learning by doing doctrine suggests that: a. MC shifts upward as current output increases b....
12. Learning by doing doctrine suggests that: a. MC shifts upward as current output increases b. an increase in this period's output will cause future periods' long-run average cost curves to be lower c. The long-run average cost curve to increase at a smaller output d. the Law of Diminishing Returns to be violated e. none of the above 13. If given quantities of soap and shampoo can be produced together at a lower total cost than they could be...
4. A company produces economic analysis reports using hours of labor (L) and computers (K). The...
4. A company produces economic analysis reports using hours of labor (L) and computers (K). The production function is ? = 2?√? Initially, in the short run, they have just 1 computer (K = 1). The wage is $20 per hour, and the cost of capital is $10. a. Derive short run total cost and short run average costs curves, with costs as a function of q. Do these costs curves exhibit economies or diseconomies of scale? Explain. (5) b....
Suppose that a particular firm is in a perfectly competitive constant-cost industry. When it is using...
Suppose that a particular firm is in a perfectly competitive constant-cost industry. When it is using the optimal amount of capital for the long-run, total cost is C(q)=1000+(q2/10), ATC(q)=(1000/q)+q/10, and marginal cost is MC(q)=2q/10. This implies that ATC=MC at a quantity of 100 and a per unit cost of $20. 1. At what quantity is average total cost minimized? 2. What is the long-run competitive equilibrium price? 3. If market demand is QD=12,000-200P and short-run market supply is QS=300P, what...
Q1: The following graph shows the current short-run average total cost (ATC), short-run marginal cost (MC),...
Q1: The following graph shows the current short-run average total cost (ATC), short-run marginal cost (MC), and long-run average cost (LATC) curves of a typical perfectly competitive firm that uses only labour and physical capital to produce its product and the current market price (PⓇ). S/unit MC ATC LATC B Pa E Q1 Q2 Quantity a) How many units of output would the firm choose to produce in the short run? Explain. b) Is the firm making an economic profit...
produce 16000 units of output. What is the cost minimizing combination of capital and labor for...
produce 16000 units of output. What is the cost minimizing combination of capital and labor for this firm? What is it's minimized cost of producing 16000 units of output? 2.2 Problem 2 In a perfectly competitive market all firms (including potential entrants) have a total cost function given by TC(Q) = 100Q - QP + ', where Q is that firm's output. Therefore, each firm's average cost function is AC(Q) = 100-Q+ Qand each firm's marginal cost function is given...
8. Consider the following Demand (Price and Marginal Revenue) and Cost (Total and Marginal) relationships expressed...
8. Consider the following Demand (Price and Marginal Revenue) and Cost (Total and Marginal) relationships expressed as functions of Q: Price = P(Q) = 310 – 2Q TC = TC(Q) = 3500 + 70Q + Q2 MR = MR(Q) = 310 – 4Q MC = MC(Q) = 70 + 2Q a. What is the profit-maximizing level of output? What is the price at that level? b. Should the firm continue operating in the short run? In the long run? c....
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
11. In drawing an isoquant curve, what is measured on the axes? a. the prices of...
11. In drawing an isoquant curve, what is measured on the axes? a. the prices of the inputs b. price and output c. the physical quantities of the two inputs d. expenditure on the two inputs e none of the above 12. Learning by doing doctrine suggests that: a. MC shifts upward as current output increases b. an increase in this period's output will cause future periods' long-run average cost curves to be lower c. The long-run average cost curve...
19. Assume that marginal revenue equals rising marginal cost at 100 units of output. At this...
19. Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, the firm's average fixed cost is $6 and its average total cost is $10. The price of the product is $8. In order to maximize profit, the competitive firm should: a. shut down b. produce 100 units c. produce more than 100 units d. produce less than 100 units e. indeterminate 20. If the entry of new firms into a perfectly competitive...
12. Learning by doing doctrine suggests that: a. MC shifts upward as current output increases b. an increase in this period's output will cause future periods' long-run average cost curves to be lower c. The long-run average cost curve to increase at a smaller output d. the Law of Diminishing Returns to be violated e. none of the above 13. If given quantities of soap and shampoo can be produced together at a lower total cost than they could be...
Q1: The following graph shows the current short-run average total cost (ATC), short-run marginal cost (MC), and long-run average cost (LATC) curves of a typical perfectly competitive firm that uses only labour and physical capital to produce its product and the current market price (PⓇ). S/unit MC ATC LATC B Pa E Q1 Q2 Quantity a) How many units of output would the firm choose to produce in the short run? Explain. b) Is the firm making an economic profit...
produce 16000 units of output. What is the cost minimizing combination of capital and labor for this firm? What is it's minimized cost of producing 16000 units of output? 2.2 Problem 2 In a perfectly competitive market all firms (including potential entrants) have a total cost function given by TC(Q) = 100Q - QP + ', where Q is that firm's output. Therefore, each firm's average cost function is AC(Q) = 100-Q+ Qand each firm's marginal cost function is given...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
11. In drawing an isoquant curve, what is measured on the axes? a. the prices of the inputs b. price and output c. the physical quantities of the two inputs d. expenditure on the two inputs e none of the above 12. Learning by doing doctrine suggests that: a. MC shifts upward as current output increases b. an increase in this period's output will cause future periods' long-run average cost curves to be lower c. The long-run average cost curve...
19. Assume that marginal revenue equals rising marginal cost at 100 units of output. At this output level, the firm's average fixed cost is $6 and its average total cost is $10. The price of the product is $8. In order to maximize profit, the competitive firm should: a. shut down b. produce 100 units c. produce more than 100 units d. produce less than 100 units e. indeterminate 20. If the entry of new firms into a perfectly competitive...
Most questions answered within 3 hours.
-
4. Without doing any calculations, predict whether the observed
∆T would increase, decrease or remain the...
asked 47 minutes ago -
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 1 hour ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 1 hour ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 1 hour ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 2 hours ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 3 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 3 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 3 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 3 hours ago -
Why are polymers not typically casted into products?
asked 3 hours ago -
When rolling a die 129 times, what is the probability of rolling
a 6 no more...
asked 3 hours ago -
4. A call option currently sells for $7.75. It has a strike
price of $85 and...
asked 3 hours ago