{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

problem9keyS06

# problem9keyS06 - E303 Davis Problem Set 9 Fall 2005 KEY 1...

This preview shows pages 1–3. Sign up to view the full content.

E303. Davis Problem Set 9 Fall 2005 KEY 1. Optimal Use of a Single Input. Julian Smyth is manages production at Taffy Apple Inc., a company that produces a variety of taffy/fruit candies. Over the last several months, he has varied then number of employees on his caramel apple production line, and found the following relationship. Labor TP MP MRP 5 100 6 150 50 250 7 230 80 400 8 300 70 350 9 360 60 300 10 410 50 250 11 450 40 200 12 480 30 150 a. In the column labeled MP, calculate the marginal product of labor. (Note, make your first entry in row 6, as the change between 5 and 6 units of labor) See listings under MP b. Suppose the apples sell for \$5 per (dozen) box. Calculate the Marginal Revenue Product (MRP) See listing under MRP c. If labor costs \$225 per day, how many laborers should the firm hire? Number ______10___________________________________

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
2. Optimal Use of a Single Input. A Graphical Representation. a. In the coordinate axes provided below, illustrate the general relationship between MRP and the Price of Labor. Identify the equilibrium quantity of labor to hire. (Note, your graph need not use the numbers in problem 3.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

problem9keyS06 - E303 Davis Problem Set 9 Fall 2005 KEY 1...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online