Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 18 - Part VI - The Markets for the Factors of Production - Problems and Applications - Page 392: 3

Answer

a) Please see the first table. b) 10 dollars c) Please see the second screenshot. d) Please see the second screenshot. e) The demand curve shifts to the right if the output price rises.

Work Step by Step

a) The table shows the marginal product for each additional worker. b) The firm is in a perfectly competitive marketplace, so the value of the marginal product of each worker is the same as the value of the output (10 dollars). c) The second screenshot shows the demand schedule for the number of workers at each wage level. d) The second screenshot shows the graph of the demand schedule. e) Since the price increases, the value of the marginal product of labor also increases. Because of this, the demand curve shifts to the right.
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