Question 1: Suppose that the firm's Production Data is given in the following schedule (where Q is the level of output).
|
Workers
|
Output
Q (units)
|
|
0
|
0
|
|
1
|
600
|
|
2
|
1000
|
|
3
|
1290
|
|
4
|
1480
|
|
5
|
1600
|
|
6
|
1680
|
If P=$50 and w=$14,500, how many workers should the firm hire to maximize profits?
|
Workers
|
Output (Q)
|
MPL
|
|
0
|
0
|
---
|
|
1
|
600
|
600
|
|
2
|
1000
|
400
|
|
3
|
1290
|
290
|
|
4
|
1480
|
190
|
|
5
|
1600
|
120
|
|
6
|
1680
|
80
|
What is 2 = $14500? w=$14,500.
Question 3: Suppose that the firm's cost function is given in the following schedule (where Q is the level of output).
|
Output
Q (units)
|
Total Cost
|
|
0
|
7
|
|
1
|
25
|
|
2
|
37
|
|
3
|
45
|
|
4
|
50
|
|
5
|
53
|
|
6
|
58
|
|
7
|
66
|
|
8
|
78
|
|
9
|
96
|
|
10
|
124
|
Determine the:
(a) Marginal cost schedule
See table below.
(b) Total cost schedule
|
Output (Q)
|
Total Cost
|
MC
|
|
0
|
7
|
---
|
|
1
|
25
|
18
|
|
2
|
37
|
12
|
|
3
|
45
|
8
|
|
4
|
50
|
5
|
|
5
|
53
|
3
|
|
6
|
58
|
5
|
|
7
|
66
|
8
|
|
8
|
78
|
12
|
|
9
|
96
|
18
|
|
10
|
124
|
28
|
E = 1.58689459
What problem did this address?
|
Workers
|
Output (Q)
|
MPL
|
|
0
|
0
|
---
|
|
1
|
600
|
600
|
|
2
|
1000
|
400
|
|
3
|
1290
|
290
|
|
4
|
1480
|
190
|
|
5
|
1600
|
120
|
|
6
|
1680
|
80
|