Question

The following table shows a part of the daily labor-output relationship for a firm. In this table q is the quantity of output produced and L the amount of labor required to produce the corresponding level of output. For example, to produce 2 units of output per day we need a total of 50 units of labor and to produce 5 units per day we need a total of 120 units of labor. The wage rate is $40 per day per worker and the fixed cost of production is $3,200. By the way, such a relationship between inputs and outputs is called a production function.

q	l
0	0
1	30
2	50
3	60
4	80
5	120
6	190

The marginal cost of producing the fourth unit of output is ________ dollars. Note: Enter the number without a dollar sign, commas, or decimal places.

Answer 1

Quantity	Labour	Variable cost @$40 per day per worker	Fixed Cost	Total Cost	Marginal Cost
0	0	0	3200	3200
1	30	1200	3200	4400	1200
2	50	2000	3200	5200	800
3	60	2400	3200	5600	400
4	80	3200	3200	6400	800
5	120	4800	3200	8000	1600
6	190	7600	3200	10800	2800
Wage rate is $40 per day per worker
Fixed cost of production is $3,200
The marginal cost of producing the fourth unit of output is 800 dollars