2. Study Questions and Problems #2

The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant.

In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.)

Labor Input	Total Output	Marginal Product	Marginal Revenue Product
(Workers per day)	(Boxes of paper per day)	(Boxes of paper per day)	Price = $10	Price = $20
(Dollars)	(Dollars)
0	0
1	25
2	45
3	60
4	70
5	75
6	77

Assume that the selling price of paper is $10 per box.

If the wage rate is $125.00 per day, Zippy will hire ------ workers.

Continue to assume that the selling price of paper is $10 per box.

If the wage rate is $75.00 per day, Zippy will hire ------ workers.

Assume that the selling price of paper is now $20 per box.

If the wage rate remains at $75.00 per day, Zippy will hire ------- workers.

8. Study Questions and Problems #9

The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires, total output, marginal product, and marginal revenue product of labor, with all other inputs being held constant. Assume that the selling price is $10 per box of paper.

Labor Input	Total Output	Marginal Product	Marginal Revenue Product
(Workers per day)	(Boxes of paper per day)	(Boxes of paper per day)	Price = $10
(Dollars)
0	0
25	$250
1	25
20	$200
2	45
15	$150
3	60
10	$100
4	70
5	$50
5	75
2	$20
6	77

If the wage rate is $175.00 per day, Zippy will hire -------- workers.

Suppose that the workers in this industry have unionized and have collectively bargained for a wage of $225.00.

As a result of this collective bargaining agreement, Zippy will ---------the number of workers it hires to hire -------- workers.