Graph the isocost line associated with a wage of $10 per hour and a price of capital of $50 for total costs of $200, $ 240, and $300. Suppose the wage rises to $15 and the price of capital stays at $50. Show how the isocost line moves for the case in which total costs are $300.
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- Item 9 The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,000. Fixed cost is $120,000. | APMP 100 80 60 MP AP 60 80 100 120 140 160 20 40 Labor When the firm uses 100 units of labor, what is marginal cost at this level of output? Multiple Choices $33.33 $25 = % O $180 O $90 Ave rage aid m arginal prodictof labor 20A small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm O A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. O B. is not maximizing profit because the marginal revenue product of labor is less than the wage. O C. is maxinmizing profit because the marginal product of labor is greater than the wage. O D. is not maximizing profit because the price of the output is not equal to the wage. O E. is not maximizing profit because the marginal product of labor is greater than the wage.QUESTION 2 K 6 isocost 3 L Based on the information in the graph aboive, what is the slope of the isocost line? # If the price of capital remains the same and the price of labor decreases, the isocost line will With the current mix of labor and capital, the marginal technical rate of subsitution is MRTS-3. If the prices of labor and capital remain as shown in the graph, then the firm will minimize the cost of production by +
- Adam operates a small shop specializing in party favors. He owns the build- ing andsupplies all of his own labor and money capital. Adam incurs no explict rental or wagecost. Before starting his own bussines Adam earned $1,000 per month by renting outthe store and earned $2,500 per month as a store manger for a lrge departmentstore chain. Because Adam use his own money capital, he also sacrificed $1,000 permonth interest earned on U.S government treasury bonds. Adam’s monthly revenuesfrom operating his shop are $10,000 and his total monthly expense for labor andsupplies amounted to $6,000. Calculate Adam’s monthly accounting and economic profitsTim works 51 hours per week, and his wage is $20 per hour. If his wage increases to $40 per hour, and his labor supply curve is downward-sloping, this means:Will decrea n he fong run, assume a firm uses both labor and capital to produce 25 units of output. The marginal product of the last unit of labor being employed is 100; the marginal product of the last unit of capital being employed is 500. The wage rate of labor is $10. If the firm is minimizing the cost of producing 25 units of output, what must be the unit price of capital?
- The slope of an isocost line is equal to the Select one: O a. O b. and is negative of the ratio of input prices; constant decreases as we move down the line; the ratio of the marginal products O c. is constant; the ratio of the marginal products O d. increases as we move down the line; the ratio of input pricesSuppose Mr. Saad is a producer of Lola Loo chocolate, following is the information available of his production plant. Quantity of Labour (L) Quantity of 1 2 3 4 5 Capital (K) 10 15 25 100 50 20 30 40 50 75 50 75 100 125 150200250 300 75 90 105 120 2 30 50 62 15 If K and Lare imperfect substitutes and complements from the information above draw at least three isoquant (map) and identify the level of production. H73 4The short-run production function for a manufac- turer of wireless earbuds is shown in the table below. Based on this information, answer the fol- lowing questions. Input of Labor (workers per week) Total Output of Wireless Earbuds 1 25 2 60 3 85 4 105 115 6 120 a. Calculate the average product at each quantity of labor. b. Calculate the marginal product of labor at each quantity of labor. c. At what point does marginal product begin to diminish?
- The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. AP, MP 100 80 Average and marginal product of labor- 60 10 20 20 MP AP L 0 20 40 60 80 100 120 140 160 Labor When the firm uses 40 units of labor, what is marginal cost at this level of output? $70 ○ $35 ○ $60 $280Average and marginal product of labor 10 0 AP, MP 2 4 $0.25 $5 $6.67 $7.06 O $10.25 6 8 10 1 12 AP L Labor MP Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit. When the firm uses 6 units of labor, what is marginal cost?You have been doing research for a firm andhave discovered that the firm’s averageproduct of capital is decreasing. If capital is the onlyvariable input, what does this imply about the firmsmarginal product of capital?