The production of bagels is a function of labor and ingredients (mostly bread flour and sugar)....

The production of bagels is a function of labor and ingredients (mostly bread flour and sugar). The estimated that the production function of the Bagel Shop is,

Q=2L+L^0.7I^0.3 ,

where L is number of workers and I is an aggregate measure of ingredients.

What is the short-run production function if ingredients are fixed at I=100?
What is the marginal product of labor (MP_L) at The Bagel Shop?
What is the average product of labor (AP_L) at The Bagel Shop?

Suppose the wage rate, w, is $15 and the cost of one unit of ingredients is $2. Currently, The Bagel Shop employs four workers (L=4).

What is the marginal cost (MC) of a bagel at The Bagel Shop?
What is the average variable cost (AVC) of a bagel at The Bagel Shop?
What is the average cost (AC) of a bagel at The Bagel Shop?
Would The Bagel Shop make a positive profit if the price of a bagel was $4.50?

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Does bread lose its vitamins when stored? Small loaves of bread were prepared with flour that...

Does bread lose its vitamins when stored? Small loaves of bread were prepared with flour that was fortified with fixed amounts of vitamins A (beta-carotene) and E. After baking, the vitamin A and vitamin E contents of two loaves were measured. Another four loaves were baked at the same time. Two of them were stored for three days, and two of them for seven days, before taking measurements. The measurements of the amounts of vitamins A and E in each...

Production quantity: 4200 units Total labor fee: $ 12600 Ingredients: $ 21,000 Fixed cost: $ 7000...

Production quantity: 4200 units Total labor fee: $ 12600 Ingredients: $ 21,000 Fixed cost: $ 7000 Total: $ 42,700 Unit selling price: $ 15. This business: a) Calculate the marginal cost? b) Calculate your marginal income? c) According to the marginal cost method, the price is $ but if it does not, calculate the total income? This business wants to open up to X market abroad. Information about the X market is as follows. Production quantity for X market: 800...

Amanda is convinced that white flour and white sugar cause her to overeat, resulting in an...

Amanda is convinced that white flour and white sugar cause her to overeat, resulting in an extra 30 pounds of weight she is carrying around. To control her impulse to overeat, she has decided to eliminate all foods made with white or whole wheat flour and white sugar from her diet. Her total calorie needs are estimated to be 2000 per day. Yesterday, she ate the the foods on the right: Breakfast: 2 scrambled eggs and 2 sausage links; 1...

Who can find the food with the most forms of sugar? Review the ingredients on a...

Who can find the food with the most forms of sugar? Review the ingredients on a food label. Identify the different forms of sugars in that food. Discovering Nutrition, to view the various forms of sugar. Post the name of the food, including its brand if known, and the types of sugar listed in the ingredients. Summarize how the sugar(s) will be digested and absorbed by your body. After these sugars are eaten, how will they impact your brain? PLEASE...

Suppose that production of widgets requires capital and labor. The production function is constant returns to...

Suppose that production of widgets requires capital and labor. The production function is constant returns to scale and capital investment is sunk. There are no other barrier to entry. Is the investment in sunk capital a barrier to entry? Explain. What will the market equilibrium be if there are many possible entrants?

Elegant Bakehouse specialises in wedding cakes with each cake sold for $800. The flour, sugar and...

Elegant Bakehouse specialises in wedding cakes with each cake sold for $800. The flour, sugar and other relevant materials such as ribbons costs Elegant Bakehouse a standard cost of $75. The fixed costs incurred for such things as bakery upkeep and administrative expenses are $54,000. Brian, the owner of Elegant Bakehouse, just bought a new baking oven for $100,000 which is to be depreciated over 10 years to a salvage value of zero. What is the NPV break-even level of...

Name five additives, besides flour, yeast, water, sugar and salt, found on a label of a...

Name five additives, besides flour, yeast, water, sugar and salt, found on a label of a loaf of bread. State the function of these additives

One widely observed practice after the COVID-19 lockdown was an increase in homemade bread. Flour, butter...

One widely observed practice after the COVID-19 lockdown was an increase in homemade bread. Flour, butter and sugar were difficult to find, and when they were available in grocery stores there were limits on the amounts any person could purchase at one time. How might you explain this, using the information above?

1) You plan a meal with the following ingredients and requirements: bread potatoes meat beans eggs...

1) You plan a meal with the following ingredients and requirements: bread potatoes meat beans eggs butter requirement units lb lb oz lb number oz cost $1.89 $0.75 $0.48 $2.29 $0.15 $2.85 calaries 280 250 43 78 160 300 2200 at least vitamin A 5 15 37 20 12 0 300 at least vitamin c 0 70 0 50 0 0 60 at least protein 3 5 40 12 10 0 80 at least fat 8 2 25 3 18...

A closed economy has two factors of production: capital and labor. The production function is known...

A closed economy has two factors of production: capital and labor. The production function is known to exhibit constant returns to scale. The capital stock is about 4 times one yearís real GDP. Approximately 8% of GDP is used to replace depreciating capital. Labor income is 70% of real GDP. Real GDP grows at an average rate of 4% per year. Assume the economy is at a steady state. (a) Is the capital per e§ective worker lower or larger than...

Subjects