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The following table depicts the output of a firm that manufactures computer printers.




28-1. The following table depicts the output of a firm;that manufactures computer printers. The printers;sell for $100 each.;Calculate the marginal physical product and marginal;revenue product at each input level above;10 units. (See page 620.);28-2. Refer back to your answers to Problem 28-1 in;answering the following questions. (See pages;620622.);a. What is the maximum wage the firm will be;willing to pay if it hires 15 workers?;b. The weekly wage paid by computer printer;manufacturers in a perfectly competitive market;is $1,200. How many workers will the;profit-maximizing employer hire?;c. Suppose that there is an increase in the demand;for printed digital photos. Explain the likely;effects on marginal revenue product, marginal;factor cost, and the number of workers hired by;the firm.;28-4. Explain how the following events would affect the;demand for labor. (See pages 621622.);a. A new education program administered by the;company increases labors marginal product.;b. The firm completes a new plant with a larger;workspace and new machinery.;28-8. A firm hires labor in a perfectly competitive labor;market. Its current profit-maximizing hourly output;is 100 units, which the firm sells at a price of;$5 per unit. The marginal physical product of the;last unit of labor employed is 5 units per hour.;The firm pays each worker an hourly wage of $15.;(See pages 626 and 633.);a. What marginal revenue does the firm earn;from sale of the output produced by the last;worker employed?;b. Does this firm sell its output in a perfectly competitive;market?;28-12. A profit-maximizing monopolist hires workers in a;perfectly competitive labor market. Employing the;last worker increased the firms total weekly output;from 110 units to 111 units and caused the firms;weekly revenues to rise from $25,000 to $25,750.;What is the current prevailing weekly wage rate in;the labor market? (See page 621.);28-14. The current market wage rate is $10, the rental;rate of land is $1,000 per unit, and the rental rate of;capital is $500. Production managers at a firm find;that under their current allocation of factors of;production, the marginal physical product of labor;is 100, the marginal physical product of land is;10,000, and the marginal physical product of capital;is 4,000. Is the firm minimizing costs? Why or;why not? (See page 634.);31-4. Consider the diagram below, which displays the;marginal cost and marginal benefit of water pollution;abatement in a particular city, and answer;the following questions. (See page 692.);a. What is the optimal percentage degree of water;cleanliness?;b. When the optimal percentage degree of water;cleanliness has been attained, what cost will be;incurred for the last unit of water cleanup?;31-10. The following table gives hypothetical annual total;costs and total benefits of maintaining alternative;populations of Asian elephants. (See page 697.);a. Calculate the marginal costs and benefits, and;draw marginal benefit and cost schedules.;b. Given the data, what is the socially optimal world;population of Asian elephants?;c. Suppose that two events occur simultaneously.;Technological development allows machines to;do more efficiently much of the work that elephants;once did, which reduces by $10 million;the marginal benefit of maintaining the elephant;population for each 7,500 increment in the elephant;population. In addition, new techniques;for breeding, feeding, and protecting elephants;reduce the marginal cost by $40 million for each;7,500 increment in the elephant population.;What is the new socially optimal population of;Asian elephants?


Paper#18179 | Written in 18-Jul-2015

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