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# week4 - should buy and use_2 2 See the table below and...

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Answer each of the following questions using economic theory covered in this lesson. 1. Marginal revenue product is defined as the change in total revenue that results from the employment of an additional unit of a resource. A widget producer wishes to determine how the addition of pounds of rubber will affect its MRP and profits. See the table below, and answer each of the questions. (40pts/10pts each) Pounds of rubber (quantity of resource) Number of widgets (total product) Price of widgets (\$) 0 1 2 3 4 5 0 20 35 45 50 53 - 12 10 8 6 4 a. The marginal product of the 3 rd pound of rubber is ____10___________. b. The marginal revenue product of the 3 rd pound of rubber is ____10____. c. The price of rubber is \$110 per pound. To maximize profit, the widget producer should produce ________35__________. d. The price of rubber is \$110 per pound. To maximize profit, the widget producer

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Unformatted text preview: should buy and use: _______2___________. 2. See the table below, and answer each of the questions. (60pts/12pts each) a. If the market represented in exhibit above is allowed to operate freely, total employment in the market will be ________720__________. b. If a union raises the wage to \$4, total employment in the market will be ____600___. c. The approximate total surplus of labor after the union wage is ______200_________. d. If the market is allowed to operate freely, total employment by the typical employer (illustrated in the right-hand panel) will be ______12__________. e. If a union raises the market wage to \$4, total employment by the firm (in the right-hand panel) will be ______10__________....
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week4 - should buy and use_2 2 See the table below and...

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