Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Having trouble with this 3 question. Can someone explain it to me ^^ This question examines the choice of hiring workers. You will use the

Having trouble with this 3 question. Can someone explain it to me ^^

This question examines the choice of hiring workers. You will use the amount of output produced by different numbers of workers to identify the marginal product of labor and the marginal revenue product of labor. Additionally, you will identify the number of workers that a firm should hire.

Sara's Subs sells sandwiches at lunchtime. Below, you are provided with the number of sandwiches that Sara's Subs can produce with different numbers of workers.

Labor(workers)

Output

(sandwiches)

Marginal Product

(sandwiches)

Price

(dollars per sandwich)

Marginal Revenue

Product

(dollars)

0 0 ----- $4 -----
1 12 12 4 576
2 21 9 4 324
3 27 6 4 144
4 30 3 4 36
5 32 2 4 16

Task 1: In the table above, identify the marginal product associated with hiring each number of workers.

Task 2: In the table above, identify the marginal revenue product associated with hiring each number of workers at a price of $4 per sandwich.

Task 3: Suppose that the price of a sandwich is $4 and the cost of hiring a worker is $24. How many workers should Sara's Subs hire? Explain your answer carefully.

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

Step: 3

blur-text-image

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

Society, Economy, Religion And Festivals Of Tiwas In Assam

Authors: Bandana Baruah

1st Edition

9351288633, 9789351288633

More Books

Students also viewed these Economics questions

Question

155. Why would a firm decide to voluntarily split up?

Answered: 1 week ago

Question

Where do your students find employment?

Answered: 1 week ago