Complete the table.

Question

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Answer 1

Question

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

(b)

To determine

Marginal revenue product.

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(c)

To determine

The numbers of workers to be hired.

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(d)

To determine

The numbers of workers to be hired.

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(e)

To determine

The marginal product and marginal revenue product.

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

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Students have asked these similar questions

a) Assume there are two firms, 1 and 2, competing as Cournot duopolists in a market, selling a homogeneous product. Demand is given by p = 36 – (q1 + q2), where p is price and q1 and q2 are the outputs of firms 1 and 2 respectively. Each firm faces a marginal cost of 6 per unit of output and no fixed cost. Find each firm’s optimal output, the price at which they sell, each firm’s profit , and consumer surplus. b) Now assume that the firms face the same costs, but horizontally differentiate their product, so that firm 1 faces demand p1 = 36 – (q1 + q2/2) and firm 2 faces demand p2 = 36 – (q1/2 + q2). Assume Cournot competition. Calculate the new equilibrium prices and outputs for each firm, consumer surplus and profits. c) Now assume that rather than facing a given degree of product differentiation, the firms can choosehowdifferentiatedtheirproductsare.Thisisequivalenttoinversedemandequationsp1 =36 –(q1 +θq2)andp2 =36–(θq1 +q2),0≤θ≤1,withθdeterminedbythefirms’choicesofproduct…

Assume there are two firms, 1 and 2, competing as Cournot duopolists in a market, selling a homogeneous product. Demand is given by p = 36 – (q1 + q2), where p is price and q1 and q2 are the outputs of firms 1 and 2 respectively. Each firm faces a marginal cost of 6 per unit of output and no fixed cost. Find each firm’s optimal output, the price at which they sell, each firm’s profit , and consumer surplus.

What is the relationship between the humanities and self identity

Answer 2

Question

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

(b)

To determine

Marginal revenue product.

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(c)

To determine

The numbers of workers to be hired.

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(d)

To determine

The numbers of workers to be hired.

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(e)

To determine

The marginal product and marginal revenue product.

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

(b)

To determine

Marginal revenue product.

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(c)

To determine

The numbers of workers to be hired.

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(d)

To determine

The numbers of workers to be hired.

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(e)

To determine

The marginal product and marginal revenue product.

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

(b)

To determine

Marginal revenue product.

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(c)

To determine

The numbers of workers to be hired.

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(d)

To determine

The numbers of workers to be hired.

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(e)

To determine

The marginal product and marginal revenue product.

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

(b)

To determine

Marginal revenue product.

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(c)

To determine

The numbers of workers to be hired.

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(d)

To determine

The numbers of workers to be hired.

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

(e)

To determine

The marginal product and marginal revenue product.

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 6

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

Answer 7

Chapter 10, Problem 1.3P

(a)

To determine

Complete the table.

Answer 8

(a)

Expert Solution

Explanation of Solution

The marginal product is the additional output produced due to the employment of an additional unit of labor. The marginal product can be obtained using Equation 1 as given below:

Marginal product= Total outputPresent−Total outputPreviousUnits of laborPresent−Units of laborPrevious (1)

Substitute the respective values in Equation (1) to calculate the marginal product.

Marginal product=20−01−0=201=20

The marginal product of first worker is 20.

Total revenue can be calculated using Equation (2) as follows:

Total revenue=Total output×Price (2)

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue=20×12=240

The total revenue from one worker is $240.

When the price of the soccer ball is $12 per ball, the marginal revenue product can be calculated using Equation (3) as follows:

Marginal revenue product=Marginal product×Price (3)

Substitute the respective values in Equation (3) to calculate the marginal revenue product.

Marginal revenue product=20×12=240

The marginal revenue product of first labor is $240.

Table 1 shows the values of marginal product, total revenue, and marginal revenue product, which are obtained using Equations (1), (2), and (3).

Table 1

Number of Workers	Number of Soccer Balls Produced Per Day	Marginal Product	Total Revenue	Marginal Revenue Product
0	0	—	$0	—
1	20	20	240	$240
2	50	30	600	360
3	90	40	1,080	480
4	140	50	1,680	600
5	180	40	2,160	480
6	210	30	2,520	360
7	238	28	2,856	336
8	256	18	3,072	216
9	270	14	3,240	168
10	280	10	3,360	120

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Total revenue: Total revenue is defined as the total income earned from the sale of output produced.

Answer 13

(b)

To determine

Marginal revenue product.

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 14

(b)

To determine

Marginal revenue product.

Answer 15

(b)

Expert Solution

Explanation of Solution

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue4=140×12=1,680

The total revenue from four workers is $1,680.

Substitute the respective values in Equation (2) to calculate the total revenue.

Total revenue5=180×12=2,160

The total revenue from four workers is $2,160.

The marginal revenue product can be calculated using Equation (4) as follows:

Marginal revenue product=Total revenuePresent−Total revenuePreviousLaborPresent−LaborPrevious (4)

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=2,160−1,6805−4=480

The marginal revenue product of fifth worker is $480.

Calculation of marginal revenue product using marginal product.

Substitute the respective values in Equation (4) to calculate the marginal revenue product.

Marginal revenue product=40×12=480

The marginal revenue product of fifth worker is $480.

Thus, it is verified that marginal revenue product can be calculated using both methods.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 20

(c)

To determine

The numbers of workers to be hired.

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 21

(c)

To determine

The numbers of workers to be hired.

Answer 22

(c)

Expert Solution

Explanation of Solution

The firm should hire workers as long as the marginal revenue product of labor is greater than the wage rate. If the firm continues operation, at wage rate equal to $320, the firm should employ 7 workers. This is because the marginal revenue product of the 7th worker is $336, and when the 8th laborer is employed, the marginal revenue product of labor falls to $216.

Answer 23

(c)

Expert Solution

Answer 24

(c)

Expert Solution

Answer 25

Expert Solution

Answer 26

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 27

(d)

To determine

The numbers of workers to be hired.

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 28

(d)

To determine

The numbers of workers to be hired.

Answer 29

(d)

Expert Solution

Explanation of Solution

When the wage rate increases to $400, the number of workers to be hired reduces to 5. The marginal revenue product of the 5th laborer is $480, which is greater than the wage rate. When the 6th worker is employed, the marginal revenue product falls to $360, which is less than wage rate.

Answer 30

(d)

Expert Solution

Answer 31

(d)

Expert Solution

Answer 32

Expert Solution

Answer 33

Economics Concept Introduction

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 34

(e)

To determine

The marginal product and marginal revenue product.

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.

Economics Concept Introduction

Marginal product: Marginal product is defined as the additional output produced by increasing the input factor by one unit.

Marginal revenue product: Marginal revenue product is defined as the additional revenue earned by a firm using one additional unit of an input.

Answer 35

(e)

To determine

The marginal product and marginal revenue product.

Answer 36

(e)

Expert Solution

Explanation of Solution

When the firm uses new production technology, the marginal product of labor and the marginal revenue product of labor by 50 percent at each worker. When the wage rate is $400, the firm should hire seven workers. The marginal revenue product of the 7th worker is $504, which is higher than the wage rate.