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(50) 3. Trans-Fat Corp. is setting up a small Twonky factory in Albany. Table I shows the hourly output in Twonkies associated with each level
(50) 3. Trans-Fat Corp. is setting up a small Twonky factory in Albany. Table I shows the hourly output in Twonkies associated with each level of employment. Table 1 Workers 2 4 5 6 7 8 9 10 11 12 Output 5 11 18 26 35 43 50 56 61 65 68 70 (a) Tabulate and plot the marginal productivity and average productivity of labor curves for the factory. (b) If a Twonky retails for $2 each. How many workers would the firm hire if the wage was $12/hr? (c) Plot out the short run labor demand curve for the factory for wages between $4 and $20/hr. (d) What is the elasticity of short-run labor demand for wages close to$12/hr? (e) Suppose the price of Twonkies increases to $3. How many do they hire now? (f) Suppose instead that the firm is considering expanding the factory so that output at every level of employment is twice as high. How many workers would they hire at $12/hr
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