The table below presents estimates of the maximum levels of output possible with various combinations of two inputs.
Assume that a unit of output sells for $10 and that the firm currently employs four units of capital (K = 4).
(i) What is the marginal product of labor when L = 5?
(ii) What is the average product of labor when L = 5?
(iii) What is the marginal revenue product of labor when L = 5? What is the output elasticity of labor when L = 5?
(iv) If the wage rate of labor is $80, how many units of labor should the firm hire and how many units of output should it produce?

Question

The table below presents estimates of the maximum levels of output possible with various combinations of two inputs.
  Assume that a unit of output sells for $10 and that the firm currently employs four units of capital (K = 4).
(i) What is the marginal product of labor when L = 5?
(ii) What is the average product of labor when L = 5?
(iii) What is the marginal revenue product of labor when L = 5? What is the output elasticity of labor when L = 5?
(iv) If the wage rate of labor is $80, how many units of labor should the firm hire and how many units of output should it produce?

Quizplus · Accepted Answer

The Answer of The table below presents estimates of the maximum levels of output possible with various combinations of two inputs.
  Assume that a unit of output sells for $10 and that the firm currently employs four units of capital (K = 4).
(i) What is the marginal product of labor when L = 5?
(ii) What is the average product of labor when L = 5?
(iii) What is the marginal revenue product of labor when L = 5? What is the output elasticity of labor when L = 5?
(iv) If the wage rate of labor is $80, how many units of labor should the firm hire and how many units of output should it produce?

The Table Below Presents Estimates of the Maximum Levels of Output