In the short run, a tool manufacturer has a fixed amount of capital. Labor is a
ID: 1097953 • Letter: I
Question
In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the following table.
Labor supplied Total Physical Hourly Wage Total Wage Marginal
Factor
Product Rate $ Cost Cost
---------------------- ----------------------------- ------------------ ------------- ------------------
10 100 5 ? _____
11 109 7 ? ?
12 117 9 ? ?
13 124 11 ? ?
14 130 13 ? ?
15 135 15 ? ?
A). Derive at each level of labor supplied, the firm's total wage costs. (Enter numeric responses in the table above real number).
B). Derive, at each level of labor supplied, the firm's marginal factor cost.
Explanation / Answer
Answer:
Labor Supplied Total Physical Product Hourly Wage Rate ($) Total Wage Cost Marginal Factor Cost 10 100 5 50 0 11 109 7 77 27 12 117 9 108 31 13 124 11 143 35 14 130 13 182 39 15 135 15 225 43