Chapter 7: Problem 5
If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?
Chapter 7: Problem 5
If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?
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Get started for freeA small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method choices are: Method 1: 50 units of labor, 10 units of capital Method \(2 : 20\) units of labor, 40 units of capital Method \(3 : 10\) units of labor, 70 units of capital If hiring labor for the winter costs \(\$ 100 /\) unit and a unit of capital costs \(\$ 400,\) what is the best production method? What method should the company use if the cost of labor rises to \(\$ 200 /\) unit?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
A firm is considering an investment that will earn a 6\(\%\) rate of return. If it were to borrow the money, it would have to pay 8\(\%\) interest on the loan, but it currently has the cash, so it will not need to borrow. Should the firm make the investment? Show your work.
Average cost curves (except for average fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
What is a long-run average cost curve?
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