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- Are there fixed costs in the lung-run? Explain briefly.Question 3 (a) Why does the labour demand curve slope downwards? (b) A garment factory's production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 48 4 56 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory's brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. Question 4 Using your knowledge and understanding of supply and demand analysis to graph the following and explain your graph: (a) an increase in labour productivity. (b) an increase in preference for work. (c) the trade union withdraws labour through a strike.
- (a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table. The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.24 A competitive firm will hire inputs up to the point where: a. The price of the-input equals îts marginat physical product of the input. b. The marginal product of the input reaches a maximum. The price of the input equals the(valuelof the marginal product of the input. d. The price of the input equals the price of the output.a) Fill in the empty cells in the table. You have been also given following additional info- Price = $ 10 Wage = $ 1500 Labor (L) Output (q) Marginal Product of Labor Value of the marginal product of labor: Wage Marginal profit 0 0 1 400 2 720 3 960 4 1020 b) When the company should stop hiring Workers. Explain
- 7. Firm ABC decides to hire workers for a newly established factory with a fixed amount of machinery.As Firm ABC hires additional workers, what would most likely occur to the firm's marginal product? Increase initially, but eventually decrease Decrease initially, but eventually increase Consistently increase due to diminishing marginal returns Consistently increase due to economies of scale12 true or false The point at which the marginal product of a variable input is at a maximum corresponds to the point at which marginal cost is at a maximumConsider a small business that makes pastries. The business has rented a building to be used as its factory and shop floor. The rent of the building is $2,000 per week. The rest of the firm's weekly costs are as follows: ●Income lost from alternative employment - $2,000 ●Explicit variable costs - $1,500 ●Implicit variable costs - $ 500 i. If the firm sells 1,000 pastries per week, at $6 per pastry, calculate the firm's weekly ●Accounting profit, and ●Economic profit ii. Based on your answer to part b. i. above, should the firm continue to operate? Why or why not? iii. Assume that the firm continues at the current output level of 1,000 pastries per week while the prices start to fall. The firm should consider 'shut-down' if the price falls below what dollar value? Explain using relevant calculations and concepts
- 1.The hiring of labour with fixed factor of production under short run after sometimes leads toincrease in cost only. What’s your opinion at what stage of production producer should makeaddition in labour, identify which concept in economics explains the whole situation, justify youranswer why it happens with the help of table and diagramsDescribe the construction of the firm’s demand curve for labour in the short run. Describe the relationship between the firm's demand curve for labour in the short-run and the market demand curve for labour in the short-run. In particular, is one curve likely to be more or less elastic than the other? Can you please specify why the curve is more elastic than the other. And include diagramCh07. ppt (Compatibility Mode] - Microsoft PowerPoint SIGN ANIMATIONS SLIDE SHOW TRANSITIONS REVIEW VIEW -|24 - AA E-E-E . lh Text Direction Align Tert- Shape Fil- 7 Shape Outline- Convert to SmAn- } Stvles - O Shape Effects Layout Reset BIUS A- Aa A Arrange Quick Section- es Font Paragraph Drawing Optimal Level of Variable Input Usage • Define the following • Total Revenue Product (TRP) = Q•P • Marginal Revenue Product (MRP) = ATRP A(Q P) P•AQ = P• MP AX AX AX • Total Labor Cost (TLC) =w•X ATLC = W • Marginal Labor Cost (MLC) = AX 2003 Prentice Hall Business Publishing Managerial Economics, 4/e Keal/Young NOTES COMMENTS Mehwish Bhatti's screen