Use the MP of labor column to fill in the Output columnĥ) Labor Output MP of labor MRP labor Wage Marginal profitĬonsider the able above. How much output is produced when 4 workers are hired? When a firm hires labor up to the point where w=MRP of labor, the firm is maximizing profitĤ) Labor Output MP of labor MRP labor Wage Marginal profitĬonsider the table above. The wage is less than the MRP of labor, so the firm should hire more workersģ) When a firm hires labor up to the point where the wage is equal to the marginal revenue product of labor, the firm is Yes you could increase profits by hiring at least one more worker. The marginal product of the last worker hired is 12. The demand for bagel workers is derived from the decision to supply bagels to the marketĢ) Your bagel shop sells bagels for $1.00 each and currently employs 4 bakers. In the long run all factors of production may varyġ) Select the answer below that corresponds to the idea of a derived demand curveĪ.Ě bagel producer decides to supply more bagels to the market, and as a result her demand for bagel workers increases The short run is the time period such that at least one input to production is fixed. When output is zero, variable cost is zero and total cost is equal to fixed costġ0) What is the time difference between the short run and the long run? What is this firm’s fixed cost at 18 units of output? Marginal cost may at first decrease but will eventually increaseĩ) Labor Output Variable Cost Fixed Cost Total CostĬonsider the table above. In the short run marginal product may at first increase but will eventually decrease. In the short run, as the variable input to production increases, the marginal product of that input will eventually declineħ) Which of the following is a variable cost to a firm that produces bagels?Ĩ) Marginal cost will eventually rise as production expands due to The third worker produced 9 bowls and the fourth worker hired added 7 bowls to production for a total of 40 bowls of cereal per day. The second worker Jack hired added 13 bowls of cereal to total production. The first employee that Jack hired was able to produce 11 bowls of cereal per day. The marginal product of labor is the additional output produced by the last worker hiredĦ) Jack has a restaurant that specializes in cereal. The production function shows the relationship between the quantity of inputs used in production (for example labor) and the quantity of output producedĥ) The extra output that the last worker hired adds to total production is called the The inputs to production and the quantity of output produced In the long run all inputs may varyĤ) The production function shows the relationship betweenĪ. In the short run at least one input is fixed. You can calculate Norman’s total revenue: $.50*1.5 million+$.80*1.5 million= $1.95 millionģ) The short run is a situation such thatĪ.Ět least one input to production is fixed in quantity The remaining bagels were cinnamon raisin bagels and sold for $.80 each. Half of the bagels were plain bagels and sold for $.50 each. The explicit cost of opening Dexter’s white-water rafting business is _ and the implicit cost of opening the new business is _.Įxplicit costs require an outlay of moneyĢ) Norman’s Bagel shop sold 3 million bagels last year. Dexter has $40,000 in savings that he will use to start his new business and he borrows the remaining $40,000 from a bank. his own white water rafting guided tour business. Dexter decides to leave his accounting job and start.
Document Content and Description Belowġ)ĝexter is an accountant earning $45,000 per year but he hates his job. Pennsylvania State University - MICRO ECON 102 Midterm Study Guide.
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