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# Problem_Set_7_Answers - 162 CHAPTER 7 TECHNOLOGIES COSTS...

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162 CHAPTER 7. TECHNOLOGIES, COSTS AND SUPPLY Answers to Problems on Firm’s Technologies, Production Costs & Supply Decisions. Answer to Problem 7.1. A firm produces a fine Western New York delicacy, the cardboard hamburger. Table 7.8 shows how the firm’s production of burgers varies with the quantity of labor hired. Table 7.8: The Firm’s Technology. Output Labor Marginal Average Level Input Productivity Productivity Of Labor Of Labor (burgers) (hours) (burgers/labor hour) (burgers/labor hour) 0 0 50 1 50 50 120 2 70 60 186 3 66 62 246 4 60 61 · 5 295 5 49 59 342 6 47 57 385 7 43 55 416 8 31 52 432 9 16 48 440 10 8 44 440 11 0 40 420 12 -20 35 (i) Compute the marginal physical productivities of the firm’s labor units and enter the values into the “Marginal Productivity of Labor” column of Table 7.8. Answer. See Table 7.8. (ii) In what unit is the marginal labor productivity measured? Answer. Burgers per labor hour. (iii) Where on a graph of total output versus labor used do you see the marginal physical productivities of labor represented or measured? Answer. The marginal physical productivities are the “steps up” or “steps down” in the heights on the output axis as the quantity of labor hours used is increased by one extra hour at a time. (iv) If you add up the marginal productivities of the first three labor hours, what do you get?

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