ch6b - Chapter 6 (Perfectly Competitive Supply), part two...

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Chapter 6 (Perfectly Competitive Supply), part two Tuesday, July 6
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a widget factory I own a widget factory. N is the number of employees that I have. .. Q is the number of widgets that I can make and sell per day. .. Suppose that I get $2 for each widget that I sell, and I have to pay each worker $50 per day. Not only that, but I also have to pay some other factory- related expenses of $100 per day no matter what. N Q 1 10 2 40 3 90 4 160 5 220 6 270 7 310 8 340 9 360 10 370 11 375
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QUESTION 1 (marginal product) What is the marginal product of the 5 th worker? That is, when I add the 5 th worker, how many extra widgets can I produce as a result? A) 60 B) 160 C) 375 D) 40 E) 12 N Q 1 10 2 40 3 90 4 160 5 220 6 270 7 310 8 340 9 360 10 370 11 375
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answer to question 1 What is the marginal product of the 5 th worker? That is, when I add the 5 th worker, how many extra widgets can I produce as a result? A) 60 B) 160 C) 375 D) 40 E) 12 N Q 1 10 2 40 3 90 4 160 5 220 6 270 7 310 8 340 9 360 10 370 11 375
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QUESTION 2 (value of marginal product) What is the 3 rd worker’s value of marginal product? That is, when I add the 3 worker, how much extra revenue can I produce as a result? A) $50 B) $90 C) $100 D) $160 E) $200 N Q 1 10 2 40 3 90 4 160 5 220 6 270 7 310 8 340 9 360 10 370 11 375 widget price = $2 , worker price = $50 , fixed cost is $100
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ch6b - Chapter 6 (Perfectly Competitive Supply), part two...

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