All categories

3 years ago

Suppose that the firm pays its workers $46 per day. Each unit of output sells for $12. How many workers should the firm hire

Business

1 answer:

Korolek [52]3 years ago

8 0

Solution :

A firm hires labor till a point where the cost of hiring is equal to the value of the additional revenue it produces.

We know ,

the wage rate = cos of hiring an additional worker

the value of the additional revenue that the firm produces = price x (MPI) marginal product of the labor.

Therefore, the firm will hire when :

Wage = value of the additional revenue it generates

Thus, wage = price x (MPI) marginal product of the labor ...........(i)

Therefore, given :

wage of a worker = $ 45

Price = $ 12

So, 45 = 12 x MPI

MPI = 3.8

So the marginal product of employing three days of labor = 25-18/4-3 = 7

Marginal product of employing four days of labor = 30-25/4-3 = 5

So the 4th day produces less revenue than the cost that it generates.

So, the firm should hire 3 workers.

You might be interested in

Patagonia donates at least 1% of profits to support environmental causes. There products are also produced under safe, fair, leg

Alchen [17]

Answer: corporate social responsibility practice

Explanation:

Corporate social responsibility occurs when organizations contribute to societal goals by supporting practices that are ethically oriented and have a positive effect on the economy.

Since Patagonia donates at least 1% of profits to support environmental causes and is contributing positively to the economy, then Patagonia is practicing corporate social responsibility practices.

6 0

3 years ago

LIST THE 7 MOST GORGEOUS RUSSIAN SUPERMODELS.

kvv77 [185]

Dude, you've got your priorities all sorted out ahahah

7 0

3 years ago

Read 2 more answers

In the country of Wiknam, the velocity of money is constant. Real GDP grows by 3 percent per year, the money stock grows by 8 pe

vaieri [72.5K]

Answer:

(a) 8%

(b) 5%

Explanation:

According to the classical quantity theory of money,

Money supply × Velocity = Price Level × Real GDP

Money supply denoted by M

Velocity is denoted by V

Price level is denoted by P

Real GDP is denoted by Y

Therefore,

Change in M + Change in V = Change in P + Change in Y

Since, we know that V is constant, so V = 0

∴ Change in M = Change in P + Change in Y

(a) Nominal GDP = Price × Real GDP

Change in P + Change in Y = Change in Nominal GDP = Change in M

Change in M = 8%, it is given in the question.

Therefore, Change in Nominal GDP = 8%

(b) Change in M = Change in P + Change in Y

8% = Change in P + 3%

Change in P = 8% - 3%

= 5%

We know that change in price level is the inflation rate. Hence, the inflation rate is equal to the 5%.

Real interest rate = Nominal interest rate - Inflation rate

= 9% - 5%

= 4%

6 0

3 years ago

Allegheny Company ended 2015 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $58,000 and $2,700, res

Nady [450]

Answer:

$6,500

Explanation:

Allowance for doubtful accounts is a reduction in the total amount of accounts receivable given in the company´s balance sheet. Such an allowance is actually and estimate from the management of the accounts receivables that it doesn´t expect to receive.

Ecuation:

Adjustment = - Beginning balance + Write offs + Ending balance

Adjustment = ($2,700) + $4,800 + $4,400

Adjustment = $6,500

The estimation of the write off from the previous year must be discounted, the added the write off registered during the year plus the estimate at the end of the period.

6 0

3 years ago

Use the following example to answer the questions that follow: Imagine that you deposit $25,000 in currency (which you had been

Anon25 [30]

Answer:

Money available for loans is $18,750

Explanation:

The formula for calculating the total amount of money a bank can loan is:

money available for loans = (1 - required reserve ratio) x total deposits

money available for loans = (1 - 25%) x $25,000 = 75% x $25,000 = $18,750

7 0

3 years ago