WA-4 Micro - La Rosa1 Melissa La Rosa Dr Salloum...

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La Rosa1 Melissa La Rosa Dr. Salloum Microeconomics 2/7/12 Written Assignment #4 1. Labor is the only input used by a perfectly competitive firm. It hires workers for $50 a day. The firm’s production function is as show in the following table. Each unit of output sells for $10. a. Complete the table to show the marginal product of labor and the value of the maringal product of labor? b. How many days of labor should the firm hire? Explain Hours/ day Total Fixed Costs Total Variable Costs Total Costs 0 0 0 0 1 7 7 70 2 13 6 60 3 19 6 60 4 25 6 60 5 28 3 30 6 29 1 10
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La Rosa2 2. Describe the factors of production. What are the returns to these factors(their price)? Describe the marginal products of each factor and how the value of the marginal product of each factor is determiened. Factors of production are inputs used to produce goods and services. The primary factors, which are stocks including land, labor (the ability to work), and capital goods applied to production. The primary factors facilitate production but neither become part of the product (as with raw materials) nor become significantly transformed by the production process (as with fuel used to power machinery). 'Land' includes not only the site of production but natural resources above or below the soil. Recent usage has distinguished human capital (the stock of knowledge in the labor force) from labor. Entrepreneurship is also sometimes considered a factor of production.
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