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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