1) In the table below, fill in the values for the marginal product of Labor.

Suppose that a company currently employs 1,500 workers and produces 2 million units of output per month. Labor is its only variable input, and the company pays each worker the same monthly wage. The company?s current total variable costs equal $2 million. What are the average variable costs at this firm?s current output level?

2) The following table shows marginal and average total cost schedules for a perfectly competitive firm. Currently, the market price in this industry is $4. A profit- maximizing firm will produce ___ units.

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Input of Labor (workers per week) 0 10 20 30 40 50 60 Total Output of Marginal Product of Labor DVD Drives 0 40 75 100 120 130 135 Output (units) (Q) 0 1 2 3 4 5 Marginal Cost (MC) 2 3 4 5 Average Total Cost (ATC) 6 4 3 4 4 Input of Labor (workers per week) 0 10 20 30 40 50 60 Total Output of Marginal Product of Labor DVD Drives 0 40 75 100 120 130 135 Output (units) (Q) 0 1 2 3 4 5 Marginal Cost (MC) 2 3 4 5 Average Total Cost (ATC) 6 4 3 4 4

Answer rating: 100% (QA)

1 Marginal product of labor MPL Change in total ou... View the full answer