View the step-by-step solution to:

ECON 247: Assignment 2A 1. The data below show the relationship between number of workers hired and cost and revenue for a small, competitive farm in...

ECON 247: Assignment 2A

1. The data below show the relationship between number of workers hired and cost and revenue for a small, competitive farm in Alberta.

Number of workers

Wage

Price

Output

Marginal product of labour

Value of marginal product of labour

Marginal profit

0

$170

$5

0

1

$170

$5

70

2

$170

$5

130

3

$170

$5

180

4

$170

$5

220

5

$170

$5

245

a. Complete the columns of marginal product of labour, value of marginal product of labour, and marginal profit. (3 marks)

b. If the farm above decided to maximize its profit, how many workers would it hire? Explain your answer. (2 marks)

c. Given the results from question (b) above, let's assume the above farm has now a fixed cost of $10, and labour is the only variable factor. What is the farm's profit? Show your calculation. (3 marks)

d. At what point do diminishing returns set in for the farm above? Explain. (3 marks)

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question