ECON 201 Demand: Utility and Marginality [1293 Words]

ECON 201 Demand: Utility and Marginality [1293 Words]

Asked by 2 years ago
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The Case Assignment focuses on several concepts from the labor market including marginal production, total production, and wage determination. These terms are important in determining how many workers will be hired by a firm.

Write a 4- to 5-page paper that's addresses the following questions:

  1. Discuss two factors that would increase demand for labor. (Hint: Recall that the demand for factors of production or resources is called a derived demand)

  2. If the market price of the good or service that a firm produces increases, what happen to the demand of labor? Explain.

  3. Numerical Problems. Answer the two questions below.

a. Take a look at the numerical example on page 76 of the online text Principles of Microeconomics. What would be the marginal production at a level of 20 workers? Calculate. What can be said about the total production of cars as more workers are added (Hint: use the economic concept from the chapter in your answer)?

b. Using your answer from (a) and using the information below:

  1. Each worker costs the firm $4,000 per month.

  2. Each acre of land costs the firm $1,000 per month.

  3. Each machine costs the firm $600 per month.

-Each worker costs the firm $4,000 per month.

-Price of the output (car) is $20,000

Should the firm move from the 15th to the 20th worker? In other words, should the firm hire 20 workers. Why? (Hint: You need to calculate the cost of total workers and the marginal revenue product [MRP = price of output * marginal product of labor].)

ECON 201

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Answered by 2 years ago
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 ECON 201 Demand: Utility and Marginality [1293 Words]

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Excerpt from file: Runninghead:DEMAND 1 ECON201Demand:UtilityandMarginality[1293Words] Name Institution Demand:UtilityandMarginality DEMAND 2 Laborisoneofthemainfactorsofproduction.Itcomprisesofthehumanenergyand skillsutilizedintheproductionofeconomicgoods.Laboriswhatmakesitpossibletoutilizethe

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Asked: 2 years ago