Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

U.S. logging companies employ Canadian loggers to cut Maine trees. When the federal government restricted the number of temporary workers permitted in the UnitedStates, the

U.S. logging companies employ Canadian loggers to cut Maine trees. When the federal government restricted the number of temporary workers permitted in the UnitedStates, the logging companies had to use fewer Canadian loggers. Unable to find U.S. workers willing to cuttrees, the logging companies had to lay off workers in complementary operationsfor example, truck drivers. Suppose that a logging company needs exactly one truck driver for each six loggers it employs. Each truck driver and team of six loggers can cut and transport80,000 tons of wood per day. What is the marginal revenue product function fortruckers, and how does the function depend on the number of loggersemployed?

Assume the logging industry is competitive. Let p be the price of a ton ofwood, L be the number of loggersemployed, and T be the number of truck drivers employed. The marginal revenue product function fortruckers, MRPT, is

A.

MRPT=p80,000 if LT and zero otherwise.

B.

MRPT=p80,000 if (L/6)T and zero otherwise.

C.

MRPT=p80,000 if T(L/6) and zero otherwise.

D.

MRPT=80,000(L/6)T if (L/6)T and 80,000(L/6) otherwise.

E.

MRPT=80,000 if (L/6)T and zero otherwise.

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

Research In Forest Economics And Forest Policy

Authors: Marion Clawson

1st Edition

1317362624, 9781317362623

More Books

Students also viewed these Economics questions

Question

Summarize the forms and functions of nonverbal communication.

Answered: 1 week ago

Question

Do not come to the conclusion too quickly

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago