Question

Listed below is information on production for a firm that produces wheat. They can vary the number of workers. The land they use is fixed at one acre. The Wage is $ 20, The land costs $100, The wheat sells for $ 10 per unit.

# of workers | Total product

1...............................20

2................................70

3..............................130

4..............................180

5...............................210

6................................220

7.................................222

3) With 4 workers TOTAL COST is equal to ?

4) With 6 workers TOTAL REVENUE equal to?                   

5)With 7 workers, TOTAL PROFIT is equal to ?

6) If all these workers have the same level of skill, why does worker 6 have a LARGER marginal product than worker 7 ?

7) How many workers should this firm hire to maximize its profits ?

8) If this firm does hire the number of workers you answered for question (7), they will have TOTAL PROFITS equal to ?

9) If all these workers have the same skill level, why does worker 3 have a LARGER MPL than worker 2 ?

10) What is the amount of TOTAL FIXED costs for this firm and for all firms in the SHORT run.?

Answer 1