Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm's capacity, If he adds one more worker, the firm's total

image text in transcribed
Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm's capacity, If he adds one more worker, the firm's total monthly revenue will increase from $50,000 to $58,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. Instructions: Enter your answers as a whole number a. What is the marginal revenue product of labor? The marginal revenue product of capital? b. What is the ratio of the marginal revenue product of labor to the price of labor (MRPL - PER What is the ratio of the marginal revenue product of capital to the price of capital (MRPC = PC? c. Is the firm using the least costly combination of inputs? ONo, because MRPC - PC MRPL = PL O.No, because.MRPC = Pc MRPL PC O Yes, because MRPC - PC = MRPL+ PL Yes. because MRPC - PC

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics Principles, Problems and Policies

Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

20th edition

978-0077660819, 77660811, 978-1259450242

More Books

Students also viewed these Economics questions

Question

2. To store it and

Answered: 1 week ago