Homework SourseThe Wage is 20 The land costs 100 The wheat sells for 10
The Wage is $ 20 The land costs $ 100 The wheat sells for $ 10 per unit
# of workers product marginal
1) What is the TOTAL PRODUCT with 4th workers ?
1…………………70
2) What is the TOTAL PRODUCT with 7 workers ? 2………………..100
3………………...300
3) What is TOTAL REVENUE with 7 workers ? 4…………………100
5…………….…... 50
4) What is TOTAL COST with 6 workers ? 6………………….10
7………………… 2
5)What is TOTAL COST with 7 workers ?
6) If all these workers have the same skill level, why does worker 3 have a larger Marginal product than
worker 2 ?
7) How many workers should this firm hire to maximize its profits ?
8) If this firm does hire the number of workers you answered for question (7),
they will have TOTAL PROFITS equal to ?
9) If all these workers have the same level of skill, why does
worker 7 have a SMALLER marginal product than worker 6 ?
10) What is the amount of AVERAGE VARIABLE COSTS for this firm if they hire 5 workers ?
Solution
1.
Total product with 4th workers = Total wages / Selling price per unit
= (4 × $20) / $10
= $80 / $10
= 8 units
2.
Total product with 7 workers = Total wages / Selling price per unit
= (7 × $20) / $10
= $140 / $10
= 14 units
3.
Total revenue with 7 workers = Selling price × Number of units
= $10 × 14
= $140
4.
Total cost with 6 workers = Wages of 6 workers + Land cost
= ($20 × 6) + $100
= $120 + $100
= $220
5.
Total cost with 7 workers = Wages of 7 workers + Land cost
= ($20 × 7) + $100
= $140 + $100
= $240
