Production data for Bobâs Bicycle Factory are as follows:
Number of Workers Bikes assembled per day 1 10 2 18 3 24 4 28 5 30
Other than wages, Bob has costs of $100 (for parts and so on) for each bike assembled.
Instructions: Enter your responses as integer values.
a. Bikes sell for $130 each. Find the marginal product and the value of the marginal product for each worker. Donât forget to consider Bobâs cost for parts.
Number of workers Marginal product Value of the marginal product
for each worker 1 $ 2 $ 3 $ 4 $ 5 $
b. Complete the following table showing Bobâs demand curve for labor.
Number of workers Daily wage 1 $ 2 $ 3 $ 4 $ 5 $
c. Complete the following table showing Bobâs demand curve for labor if the bikes sell for $140 each.
Number of workers Daily wage 1 $ 2 $ 3 $ 4 $ 5 $
d. Complete the following table showing Bobâs demand curve for labor if worker productivity increases by 50 percent and bikes sell for $130 each.
Number of workers Daily wage 1 $ 2 $ 3 $ 4 $ 5 $
Production data for Bobâs Bicycle Factory are as follows:
| Number of Workers | Bikes assembled per day |
| 1 | 10 |
| 2 | 18 |
| 3 | 24 |
| 4 | 28 |
| 5 | 30 |
Other than wages, Bob has costs of $100 (for parts and so on) for each bike assembled.
Instructions: Enter your responses as integer values.
a. Bikes sell for $130 each. Find the marginal product and the value of the marginal product for each worker. Donât forget to consider Bobâs cost for parts.
| Number of workers | Marginal product | Value of the marginal product for each worker |
| 1 | $ | |
| 2 | $ | |
| 3 | $ | |
| 4 | $ | |
| 5 | $ |
b. Complete the following table showing Bobâs demand curve for labor.
| Number of workers | Daily wage |
| 1 | $ |
| 2 | $ |
| 3 | $ |
| 4 | $ |
| 5 | $ |
c. Complete the following table showing Bobâs demand curve for labor if the bikes sell for $140 each.
| Number of workers | Daily wage |
| 1 | $ |
| 2 | $ |
| 3 | $ |
| 4 | $ |
| 5 | $ |
d. Complete the following table showing Bobâs demand curve for labor if worker productivity increases by 50 percent and bikes sell for $130 each.
| Number of workers | Daily wage |
| 1 | $ |
| 2 | $ |
| 3 | $ |
| 4 | $ |
| 5 | $ |
Related textbook solutions
Related questions
| Number workers (daily) | Total Revenue ($) |
| 3 | 1,350 |
| 4 | 1,580 |
| 5 | 1,760 |
| 6 | 1,885 |
| 7 | 1,965 |
Refer to the table above.
a. What is the marginal product of labor for the fifth worker?
b. If the market wage for each worker is $100 per day, how many workers
will the company hire?
c. If the market wage for each worker rose from $100 to $130 per day, how
many workers would the firm hire?
d. If there is competition from new immigrants that lowers the market wage
for each worker from $100 to $75 per day, how many workers would the
firm hire?
Suppose that a monopoly firm finds that its MR is $72 for the first unit sold each day, $71 for the second unit sold each day, $70 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on.
Instructions: Enter your answers as whole numbers.
a. What is the firm's MRP for each of the first five workers?
| Worker | MRP, unregulated |
| 1 | |
| 2 | |
| 3 | |
| 4 | |
| 5 |
b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $62 per unit for all units sold. At that price, what is the firm's MRP for each of the first five workers?
| Worker | MRP, regulated |
| 1 | |
| 2 | |
| 3 | |
| 4 | |
| 5 |
c. If the daily wage paid to workers is $258 per day, how many workers will the unregulated monopoly demand? Worker(s).
If the daily wage paid to workers is $258 per day, how many workers will the regulated monopoly demand? Worker(s).
Looking at those figures, will the regulated or the unregulated monopoly demand more workers at that wage? Unregulated/Regulated.
d. If the daily wage paid to workers falls to $121 per day, how many workers will the unregulated monopoly demand? Worker(s).
If the daily wage paid to workers falls to $121 per day, how many workers will the regulated monopoly demand? Worker(s).
Looking at those figures, will the regulated or the unregulated monopoly demand more workers at that wage? Unregulated/Regulated.
e. Comparing your answers to parts c and d, does regulating a monopoly's output price always increase its demand for resources? Yes/No.
Fill in the blanks to complete the marginal product of labor column for each worker.
| Number of workers | Output(Pizzas) | Marginal product of labour(pizzas) |
| 0 | 0 | |
| 1 | 70 | |
| 2 | 120 | |
| 3 | 160 | |
| 4 | 190 | |
| 5 | 200 |
