If a company's only variable input is labor and 50 workers are used, the average product of labor is 50, the marginal product of labor is 75, the wage rate is $80 and the total cost of fixed input is $500, which is true?

Average variable cost is rising
marginal cost is rising
average variable is lowering
you can not figure without more information

Let say a company is currently using 50 workers, has 30 sewing machines to produce 5000 shirts a day, the wage rate is $200 and the rental rate of the sewing machines is $1000. At these input levels another employee adds 200 shirts, while another sewing machine adds 500 shirts. If the company uses 35 sewers and 31 sewing machines instead, then what will happen?

Costs be unchanged & output decreases by 500 units
Costs be unchanged & output increases by 300 units
Costs be unchanged & output increases by 500 units
Output will be unchanged and costs will decrease by $800
none of these

When "economies of mass production exist does long-run average cost decrease as output increases or is it total cost decreases as output increases? Please explain.

Solution Preview

1. As the average product of labor is 50, the marginal product of labor is 75 it means that average variable cost is ...

Solution Summary

This discusses the concept of marginal product, long run average cost and average product.

Which of the following relationships is correct?
a. When marginalproduct starts to decrease, marginal cost starts to decrease.
b. When marginal cost starts to increase, average cost starts to increase.
c. When marginal cost starts to increase, average variable cost starts to increase.
d. When margina

You are the production manager at a steel plant, where all of the capital investment has been made for the next year. The only input you control is the amount of labor, which is priced at $15 per unit. Fill in the blanks in the following table and answer the question below.
Labor Total MarginalAverage

The table below presents estimates of the maximum levels of output possible with various combination of two inputs.
Capital (K)
5 11 25 37 47 51
4 10 23 33 41 44
3 8 18 25 30 34

Emily draws cartoons that she sells to her classmates. Her averageproduct of labor is five cartoons per hour if she works for one hour, four per hour, if she works for two hours, three per hour if she works for 3 hours, and two and a half per hour if she works for four hours. What is her marginalproduct of labor at one, two,

I need help with this problem:
(a) From table 6-1 constrcut a table similar to table 6-2 showing the total product, the marginalproduct, and the averageproduct of lablor, as well as the output elasticity of lablr, when capital is kept constant at 4 units rather than at 1 unit. (b) Draw a figure similar to figure 6-4 showing

Please help with the following problem. See the complete description of the problem in the attached document.
1) Complete the table (Table 1) below
2) Use Excel to draw the total product (TP) curve.
3) Use Excel to draw the averageproduct (AP) andmarginalproduct (MP) curves in the same space
4) Use the informati

Dimex Fabrication Co., a small manufacturer of sheet-metal body body parts for a major US automaker, estimates its long-run production to be
Q= -0.015625K3L3 + 10 K2 L2
where Q is the number of body parts producted daily, K is the number of sheet-, metal presses in its manufacturing plant, and L is the number of labor-hours

The marginalproduct of labor
a. measures how output changes as the wage rate changes
b. is equal to the averageproduct of labor divided by the amount of capital stock
c. is greater than the averageproduct of labor when the averageproduct of labor is decreasing
d. can be negative
e. a and b