Given that wage is $10. The last worker hired by Cal's Corn Farm added 20 ears...

Given that wage is $10. The last worker hired by Cal's Corn Farm added 20 ears of corn. The price of 4 ears of corn is $1. Should Cal hire the last worker?

Explain why the long-run average cost is typically U-shaped. Explain the connection between the shape of long run average cost curve and returns to scale.

Expert Solution

Ans. The price of 4 ears of corn = $1

=> Price of 20 ears of corn = 1*5 = $5

But wage for the last worker hired is $10, so, output produced by him has $5 value. Thus, marginal cost of hiring is more than the marginal revenue earned by him. Therefore, the last worker shouldn't be hired.

Ans. The long run average cost curve is a U-shaped curve because of the returns to scale. So, according to returns to scale, initially increasing the production will lead to a decrease in average cost making it to slope downwards, this phase is called economies of scale. As production is increased, the average cost reaches its minimum, this is called constant returns to scale and as production is increased further, the average cost starts to increase making average cost curve to slope upwards. This phase is called decreasing returns to scale. Thus, these three phases make the long run average cost curve a U-shaped curve.

* Please don’t forget to hit the thumbs up button, if you find the answer helpful.

Rahul Sunny answered 7 months ago

Corn: In a random sample of 120 ears of corn, farmer Carl finds that 10 of...

Corn: In a random sample of 120 ears of corn, farmer Carl finds that 10 of them have worms. Carl claims that less than 15% of all his corn has worms. Test this claim at the 0.01 significance level. (a) What is the sample proportion of corn with worms? Round your answer to 3 decimal places. p̂ = (b) What is the test statistic? Round your answer to 2 decimal places. zp hat = (c) What is the P-value of...

The added worker effect is when A. workers increase their hours as the hourly wage increases....

The added worker effect is when A. workers increase their hours as the hourly wage increases. B. employers add more workers when product demand increases. C. one spouse enters the labor market when the other spouse sees their job or hours cut during a downturn. D. one spouse exits the labor market during a downturn.

In Lima one worker can produce either 20 bushels of corn of 5 pounds of tomatoes...

In Lima one worker can produce either 20 bushels of corn of 5 pounds of tomatoes in one day. In Puma one worker can produce either 53 bushels of corn or 7 pounds of tomatoes in one day. The country that specializes in tomato production is willing to sell one pound of tomatoes for at least how many bushels of corn? Round to two decimal places.

A shoe factory in Athens sells shoes for $50 per pair. The last worker hired produced...

A shoe factory in Athens sells shoes for $50 per pair. The last worker hired produced an additional 8 pairs of shoes, and was paid $100 per hour. (a) Should the rm hire more workers, re some workers, or keep the same number of workers? Explain why. (b) Suppose one of the factory's machines breaks and cannot be replaced. Comment on how this will aect the productivity of each worker, and how this would aect the hiring decision of the...

4. If the output price is $5 per package, the rent for the capital is $50 per truck, and the wage of labor is $100 per worker, what is the profit if 3 trucks are rented and 20 workers are hired?

Table 3-PEX2: A Production Function with Capital and LaborCapital 6 346 490 600 692 775 846(trucks) 5 316 448 548 632 705 7754 282 400 490 564 632 6923 245 346 423 490 548 6002 200 282 346 400 448 4901 141 200 245 282 316 34615 16 17 18 19 20Labor (workers)4. If the output price is $5 per package, the rent for the capital is $50 per truck, and the wage of labor is $100 per worker, what...

Maddie Factory has employed 20 workers whose average product is 1000kg’s of wheat. Each worker is given a wage of K2000 whilst the price of each bag of wheat is K20.

Maddie Factory has employed 20 workers whose average product is 1000kg’s of wheat. Each worker is given a wage of K2000 whilst the price of each bag of wheat is K20. The factory is considering hiring an additional worker who produces 2000 bags but demands a wage of K3000. Should the additional worker be hired? Show your full working.

The daily production data of a firm are given below. The wage rate is MYR 20...

The daily production data of a firm are given below. The wage rate is MYR 20 per day for each labor (variable input) and it is the only variable cost incurred. Additionally, output refers to the total products and it is in hundreds of units. Labor Output AP MP TVC TC MC AFC AVC ATC 0 0 - - 40 - - - - 1 18 2 37 3 57 4 76 5 94 6 111 7 127 a. Complete...

Given the probability of an accident is 20% if you did not have an accident last...

Given the probability of an accident is 20% if you did not have an accident last year, but the probability of an accident is 48% if you did have an accident, what is the expected value of insurance if each accident costs $10,000 and there are 100 policies at your company?

Calculate F Test for given 10, 20, 30, 40, 50 and 5,10,15, 20, 25. For 10,...

Calculate F Test for given 10, 20, 30, 40, 50 and 5,10,15, 20, 25. For 10, 20, 30, 40, 50:

In a buffer solution prepared from 10 mL of 3.0 M Pyridine (C5H5N) added to 20...

In a buffer solution prepared from 10 mL of 3.0 M Pyridine (C5H5N) added to 20 mL of 2.0 M Pyridine Hydrochloride (C5H5NHCl) and diluted to a total volume of 200 mL- Calculate each of the following: a. The original pH of the buffer solution b. The pH upon addition of 25.0 mL of 2.0 M NaOH to part a c. The pH upon addition of 10.0 mL of 2.0 M HCl to part b

Question