Microeconomics help, economics, Microeconomics

Review: Full, Anonymous: No

Answer each of the following questions using economic theory covered in this lesson.

1. Marginal revenue product is defined as the change in total revenue that results from the employment of an additional unit of a resource. A widget producer wishes to determine how the addition of pounds of rubber will affect its MRP and profits. See the table below, and answer each of the questions. (40pts/10pts each)

Pounds of rubber

(quantity of resource)
Number of widgets

(total product)
Price

of widgets ($)

0

1

2

3

4

5
0

20

35

45

50

53
-

12

10

8

6

4

a. The marginal product of the 3rd pound of rubber is _______________.

b. The marginal revenue product of the 3rd pound of rubber is ________.

c. The price of rubber is $110 per pound. To maximize profit, the widget producer should produce

__________________.

d. The price of rubber is $110 per pound. To maximize profit, the widget producer should buy and use:

__________________.

2. See the table below, and answer each of the questions. (60pts/12pts each)

There is graphs so whoever can answer these Ill email or upload the graphs somehow.

a. If the market represented in exhibit above is allowed to operate freely, total employment in the market will be __________________.

b. If a union raises the wage to $4, total employment in the market will be _______.

c. The approximate total surplus of labor after the union wage is _______________.
d. If the market is allowed to operate freely, total employment by the typical employer (illustrated in the right-hand panel) will be ________________.
e. If a union raises the market wage to $4, total employment by the firm (in the right-hand panel) will be ________________.

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