Question Details

ECON 545
Q.3
Question 3. 3. (TCO C)  You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.  

                        Total                            Total
Workers     Labor Cost      Output     Revenue
     1                $200               50          $350
     2                  400             140            675
     3                  600             220          1120
     4                  800             270          1570
     5                1000             300          1865
     6                1200             315          2070
     7                1400             320          2170

(a.) (6 points) What is the marginal product of the second worker? 

(b.) (6 points) What is the marginal revenue product of the fourth worker?  

(c.) (6 points) What is the marginal cost of the first worker?  

(d.) (12 points) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer.   (Points : 30)