1. Beyonc uses equipment that she rents for $1000 and ingredients that cost $5.19 a serving...

Transcribed Image Text:

1. Beyoncé uses equipment that she rents for $1000 and ingredients that cost $5.19 a serving for the first 5 servings; for additional servings, she has to pay more because she has to find a new distributor and the ingredients cost $5.53. (She does not get any discount on the first six servings!) (Note that she signed a lease and pays the rent regardless of how many dinners she serves; note that regardless of how much ingredients she buys for additional servings, she pays $5.19 for the ingredients for the first 5.) She hires workers at $20 each and finds that they produce servings according to the following schedule: Servings 1 2 3 4 5 6 7 8 9 10 Total Workers 0.30 0.65 1.04 1.50 2.02 2.63 3.32 4.12 5.04 6.09 Ms Swin TOMATOES Cannny Tomatoes Reds The Amherst farmers market is a great place to get beef and vegetables for your dinner a. (1 point) Calculate and graph the additional workers needed for each serving. (Use a spreadsheet!) What is happening to the marginal productivity of labor as more is produced and more workers are hired? b. (2 points) Calculate and and graph the marginal cost of each serving. (Use a spreadsheet and show your calculations!) Why does the MC curve have the slope (up, down, or flat) that it does? What happens to the slope of the MC curve as Beyonce produces more and more servings? Why? c. (2 points) Calculate and graph the marginal cost of each serving if workers get a raise to $25/hour, with the old productivity. What happens if they also become more productive so each serving can be made with only 80% as much labor. Show your calculations! Compare the results of high wages and high productivity with the initial situation. Which would you prefer as an employer? Which would you prefer as worker? Which is better for society? 1. Beyoncé uses equipment that she rents for $1000 and ingredients that cost $5.19 a serving for the first 5 servings; for additional servings, she has to pay more because she has to find a new distributor and the ingredients cost $5.53. (She does not get any discount on the first six servings!) (Note that she signed a lease and pays the rent regardless of how many dinners she serves; note that regardless of how much ingredients she buys for additional servings, she pays $5.19 for the ingredients for the first 5.) She hires workers at $20 each and finds that they produce servings according to the following schedule: Servings 1 2 3 4 5 6 7 8 9 10 Total Workers 0.30 0.65 1.04 1.50 2.02 2.63 3.32 4.12 5.04 6.09 Ms Swin TOMATOES Cannny Tomatoes Reds The Amherst farmers market is a great place to get beef and vegetables for your dinner a. (1 point) Calculate and graph the additional workers needed for each serving. (Use a spreadsheet!) What is happening to the marginal productivity of labor as more is produced and more workers are hired? b. (2 points) Calculate and and graph the marginal cost of each serving. (Use a spreadsheet and show your calculations!) Why does the MC curve have the slope (up, down, or flat) that it does? What happens to the slope of the MC curve as Beyonce produces more and more servings? Why? c. (2 points) Calculate and graph the marginal cost of each serving if workers get a raise to $25/hour, with the old productivity. What happens if they also become more productive so each serving can be made with only 80% as much labor. Show your calculations! Compare the results of high wages and high productivity with the initial situation. Which would you prefer as an employer? Which would you prefer as worker? Which is better for society?