Chachi owns a burger shack. Chachi spends $120,000 on his mortgage and other fix
ID: 1181222 • Letter: C
Question
Chachi owns a burger shack. Chachi spends $120,000 on his mortgage and other fixed expenses, and pays each worker $125 per day.
workers Burgers
1 800
2 1500 calculate total cost with 7 workers
3 2100 $2800
4 2600
5 3000 what is the marginal product of labor of the 7th worker?
6 3300 400 hamburgers
7 3500
8 3600
So how I got $2800 is by the difference of every burgers so it 700+700+500+400+300+200=2800
and how I got 400 burger is by taking 2800 divided by 7 = 400
But its wrong and I'm so confused. Please explain
Explanation / Answer
Total Cost= fixed cost + variable cost
fixed cost is $120,000
variable cost is # of workers * $125
7*125= $875
TOTAL COST: $120,000 + $875= $120,875
MARGINAL PRODUCT OF 7th WORKER: 3500-3300= 200 BURGERS