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Answers+to+review+problems+on+topics+after+second+midterm

# Answers+to+review+problems+on+topics+after+second+midterm -...

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Answers to Review Problem 1 Economics 102 Professor Blair 1. Mary runs a small company, Footloose Boots, that manufactures hiking boots. The table below shows the total output of boots per month for different quantities of labor. a. Fill in column 3 by using the data in column 2 to compute the marginal physical product of each additional worker. b. Mary can sell boots for \$60 a pair. Each boot contains \$20 worth of leather, leaving \$40 for wages or profits. Because Mary has a small firm, the price is unaffected by the quantity that she sells. Fill in column 4 by computing the marginal revenue product of each worker. Be sure to use the \$40 net figure rather than the \$60 gross. Number of Bootmakers Total Number of Pairs of Boots Per Month Marginal Physical Product (boots) Marginal Revenue Product (dollars) 0 0 60 2400 1 60 55 2200 2 115 50 2000 3 165 45 1800 4 210 40 1600 5 250 35 1400 6 285

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