Chapter 22: Q. 22.3LO (page 486)
Explain the short-run cost curves a typical firm faces.
The price structure of all firms is counteracted into some common underlying patterns.
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Suppose that a firm's only variable input is labor, and the constant hourly wage rate is per hour. The last unit of labor hired enabled the firm to increase its hourly production from units to units. What was the marginal cost of producing units of output instead of ?
If this firm were to boost its output to 12 units of output and thereby raise its total variable costs to $54, what would be the resulting average fixed cost, average variable cost, average total cost, and marginal cost?
As ports have produced higher quantities of loading and unloading services, have there been upward movements along their AVC and MC curves or upward shifts in those curves? Explain.
Suppose that a company currently employs workers and produces million units of output per month. Labor is its only variable input, and the company pays each worker the same monthly wage. The company's current total variable costs equal million.
a. What are average variable costs at this firm's current output level?
b. What is the average product of labor?
c. What monthly wage does the firm pay each worker?
Suppose that a firm's only variable input is labor. The firm increases the number of employees from four to five, thereby causing weekly output to rise by two units and total costs to increase from per week to per week.
a. What is the marginal product of hiring five workers instead of four?
b. What is the weekly wage rate earned by the fifth worker?
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