Reference no: EM132967503

A firm currently employs 45 production workers and 6 supervisors. The marginal product of the last production worker employed is 50 units of output per hour and production workers are paid $10 per hour. The marginal product of the last supervisor employed is 150 units of output per hour and supervisors are paid $30 per hour. Every employee works 40 hours per week.

Problem 1: What is the firm's total labor cost per week? ___

Problem 2: Assume that hours of labor by supervisors (Ls) is plotted on the vertical axis and hours of labor by production workers (Lp) is plotted on the horizontal axis. The vertical intercept for the firm's isocost line is ___ and the horizontal intercept is ___.

Problem 3: Assume that the firm's isoquants are smooth curves and that labor hours can be varied continuously. Is the firm producing the maximum level of output given its current level of cost?