Factor Market Practice Problems by HC121107061418

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									AP Microeconomics                                                           Mr. Waterman

                           Factor Market Practice Problems

Problem #1

     Number of Workers                    Total Output                      MP
            1                                  10
            2                                  18
            3                                  25
            4                                  30
            5                                  32

With the addition of which worker does the firm face diminishing returns?


What is this worker's marginal product?


Problem #2

Number of Workers        Total Output            MP             MRP
       1                       5
       2                      15
       3                      28
       4                      35
       5                      32

If the price of the product is $7, what is the MRP of the 4th worker?



Problem #3

Number of Workers        Total Output
       1                       5
       2                      20
       3                      30
       4                      34
       5                      32

If the price of the product is $5 and the firm pays its workers $50 a day, how many
workers should this firm hire?
Problem #4

Number of Workers        Total Output
       1                       5
       2                      20
       3                      30
       4                      34
       5                      32

If the price of the product is $2 and the firm pays its workers $12 a day, how many
workers should this firm hire?


Problem #5

    Number of Workers                   Total Output
           1                                  4
           2                                 12
           3                                 15
           4                                 18
           5                                 19

With the addition of which worker does this firm begin to face diminishing returns?


What is the MP of this worker?


Problem #6

Number of Workers        Total Output
       1                       4
       2                      12
       3                      15
       4                      18
       5                      19

If the price of the product is $5, what is the MRP of the 2nd worker?
Problem # 7

Number of Workers         Total Output
       1                        2
       2                        9
       3                       15
       4                       18
       5                       19

If the price of the product is $10 and the firm pays its workers $38 a day, how many
workers should this firm hire?


Problem #8

Number of Workers         Total Output
       1                        2
       2                        9
       3                       15
       4                       18
       5                       19

If the price of the product is $4 and the firm pays its workers $25 a day, how many
workers should this firm hire?


Problem #9

# of Capital    TP of C                         # of Labor    TP of L
     1            8                                  1          4
     2            30                                 2          10
     3            40                                 3          16
     4            48                                 4          20
     5            52                                 5          20

Using the Least-Cost Combination of Resources, determine how many units of capital
and labor this firm will employ if they need to produce 68 units and the cost of Capital is
$2 and the cost of Labor is $1.

								
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