Use the following table to answer these questions. Assume the firm is a price taker in all
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Use the following table to answer these questions. Assume the firm is a price taker in all markets.
a. If the firm hires 4 workers, how much is it producing (assuming Q = 0 when it hires no workers).
b. If the wage is $12 and the price of output is $1, how many workers should the firm hire?
c. Answer the same question for W = $24 and P = $2; W= $36 and P = $3; W = $48 and P = $4. (You will find that only the ratio of wages to prices (W/P) matters for employment decisions.)
d. If W = $35 and P = $2, how many workers should the firm hire (if it can hire only whole labor units).
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a 68 Total Output Sum of MPPs b 5 workers c As long as WP 12 the f...View the full answer
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