The table below refers to total products and marginal products of wheat as labor

Question

The table below refers to total products and marginal products of wheat as labor level varies. The size of land is hold constant. The price of wheat is $10 per bushel. The wage rate is $40 per labors. Determine: How many labors will be hired? Total revenue Labor cost Profit Do the same practices when wage rate is $45 per labor. Labor level must be integers. Do the same practices when wage rate is $150 per labor. Will any labor be hired? The curve below represents the total cost of producing cardboard boxes. Unit for X axis is boxes per month, unit for Y axis is dollars per month. Draw the corresponding marginal cost curve and average cost curve on the specified space. Correctly label the axes.

Explanation / Answer

7.

Firm will employ the number of labors at which Marginal revenue productivity of labor (MRPL) will be equal to the labor / wage rate.

MRPL at a particular number of labor = (current revenue – just preceding revenue) / (current labor – just preceding labor)

MRPL at 11 number of labors = (920-880)/ (11-10) = 40

Thus, MRPL at 11 umber of labor is equal to the wage rate.

So,

Pl. repost other unanswered questions for their proper answers.

Labors Total Products (Bushels) Marginal Products (Bushels / labor) Revenue @ $10 per bushel Cost @ $40 per labor MRPL Profit = Revenue - Cost 0 0 ### 0 0 1 4 4 40 40 40 0 2 13 9 130 80 90 50 3 23 10 230 120 100 110 4 38 15 380 160 150 220 5 50 12 500 200 120 300 6 60 10 600 240 100 360 7 69 9 690 280 90 410 8 77 8 770 320 80 450 9 83 6 830 360 60 470 10 88 5 880 400 50 480 11 92 4 920 440 40 480 12 95 3 950 480 30 470 13 97 2 970 520 20 450

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