Question

L	W	TP	MP	MC
1			20	10
2		60	40
3			80
4		190		4
5		220

1. What is the wage that this firm must pay for the third worker? _________
2. What is the wage that this firm must pay for the fifth worker? _________
3. The TP associated with the first worker is ____________.
4. The TP of three workers is __________.
5. The MC associated with an output of 140 is _______.
6. Diminishing returns sets in with the addition of the _________ worker.
7. Region 2 of the production function begins with the addition of the _____worker.

Answer 1

Wages are constant in a perfectly competitive market for labor so wage is constant at 200. Please mind that this is only the wage rate and not the variable cost which increases with an increase in employment of labor.

MC = Change in VC/Change in Q, MP = Change in Tp/Change in L, VC= 200*L

L	W	TP	MP	VC	MC
1	200	20	20	200	10.0
2	200	60	40	400	5.0
3	200	140	80	600	2.5
4	200	190	50	800	4.0
5	200	220	30	1000	6.7
The wage that this firm must pay for the third worker is $200
The wage that this firm must pay for the fifth worker is $200
The TP associated with the first worker is 20
The TP of three workers is 140
The MC associated with an output of 140 is 2.5
Diminishing returns sets in with the addition of the 4th worker.
Region 2 of the production function begins with the addition of the 4th worker