You have been hired to manage a small manufacturing facility whose cost and prod
ID: 1091136 • Letter: Y
Question
You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.
workers
Total labor cost
output
Total revenue
1
$300
50
$350
2
600
140
675
3
900
220
1120
4
1200
270
1570
5
1500
300
1865
6
1800
315
2070
7
2100
320
2170
(a.) What is the marginal product of the second worker?
(b.) What is the marginal revenue product of the fourth worker?
(c.) What is the marginal cost of the first worker?
(d.) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer.
workers
Total labor cost
output
Total revenue
1
$300
50
$350
2
600
140
675
3
900
220
1120
4
1200
270
1570
5
1500
300
1865
6
1800
315
2070
7
2100
320
2170
Explanation / Answer
a.) 140-50=90 (6 points)
(b.) 1570-1120=450 (6 points)
(c.) 200 (6 points)
(d.) Wherever marginal revenue equals marginal cost. Lick your table into shape.
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