Answer to Question #130817 in Macroeconomics for ali sattar

Question

a firm has the following production function No:of workers 0,1,2,3,4,5,6 No: of quantity produced 0,8,15,21,26,30,33 find the MPN for each level of employment b) how many workers will it hire if the nominal wage is $38? if it is 22?

Answer 1

a) MPN = change in output/change in labour.

L 0,1, 2, 3, 4, 5, 6

TP 0,8,15,21,26,30,33

MP -, 8, 7, 6, 5, 4, 3.

b) We need to know the product price to calculate the number of workers that it will hire if the nominal wage is $38 or 22.