Business, 20.12.2019 05:31 avalonr2003

Afarmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are hired. the farmer's product sells for $3 per unit and the wage rate is $13 per worker. how many workers should the farmer hire?

a) 20.b) 32.c) 37.d) 40.

Answers: 3

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Answer from: Ataklty

C) 37

Explanation:

This question is wrong, according to given options in the question it should be, What is the farmer's profit-maximizing output?, instead of How many workers should the farmer hire?

Marginal Product of Labour (MPL): MPL is the increase in total production when one unit of labour is added.

Marginal Revenue Product of Labour (MRPL): MRPL is the increase in revenue when one unit of labour is added.

Marginal Cost of Labour (MCL): MCL is extra cost of employing an additional unit of labour

Total Product MPL MRPL MCL

1st Labour = 24

2 Labour = 32 (32-24) = 8 8 X $3 = $24 $13 ($13 X 1)

3 Labour = 37 (37-32) = 5 5 x $3 = $15 $13 ($13 X 1)

4 Labour = 40 (40-37) = 3 3 X $3 = $9 $13 ($13 X 1)

When MRPL is greater than MCL the firm is generating profit from hiring additional labour/worker.

If MRPL and MCL become 0 than the firm is neither making profit nor loss from hiring additional labour/worker.

If MCL is greater than MRPL the firm is making loss from hiring additional labour/worker.

In the above table, with 3 workers farmer's MRPL is greater than MCL but when it hires 4th worker MCL becomes greater than MRPL so firm will not hire 4th worker.

So farmer's profit-maximizing output will be 37, which is the output of 3 workers.

Answer from: Quest

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

$capital * (1+0.045)^{28} = 48,613.24$

now clearing the formula to solve for capital we got:

$capital = \frac{48,613.24}{(1+0.045)^{28}}$

and we reach the answer investment = $14,174.20

Answer from: Quest

in terms of experimental research, mcdonald’s charging different prices in the two cities relates to

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Afarmer who has fixed amounts of land and capital finds that total product is 24 for the first worke...