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Demand Table: Led Zep. I think per average income per capita in the U.S. is in the range. 1)Less than $20,000 9) $55,000-$60,000 2) $20,000-25,000 10) more than $60,000 3) $25,000-30,000 4) $30,000-35,000 5) $35,000-40,000 6)$ 40,000-45,000 7) $45,000-50,000

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Demand Table: Led Zep


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i think per average income per capita in the u s is in the range
I think per average income per capita in the U.S. is in the range

1)Less than $20,000 9) $55,000-$60,000

2) $20,000-25,000 10) more than $60,000

3) $25,000-30,000

4) $30,000-35,000

5) $35,000-40,000

6)$ 40,000-45,000

7) $45,000-50,000

8) $50,000-$55,000

i think per average income per capita in the u s is in the range1
I think per average income per capita in the U.S. is in the range

1)Less than $20,000 9) $55,000-$60,000

2) $20,000-25,000 10) more than $60,000

3) $25,000-30,000

4) $30,000-35,000

5) $35,000-40,000

6)$ 40,000-45,000

7) $45,000-50,000

8) $50,000-$55,000

correct answer
Correct answer

U.S. Per capita income in 2006 was about $43,000.

slide8
If the average value product of labor is greater than the wage, a firm can increase its profits by hiring more labor.
  • True
  • False
example wage is 25
Example: Wage is $25
  • With 4 workers, Avg Val Product is $90.
  • That exceeds the wage.
  • Will profits increase from hiring a fourth worker?
  • No. See table.
slide10
A profit maximizing firm will choose the amount of labor that maximizes the marginal value product of labor.
  • True
  • False
example wage is 251
Example: Wage is $25
  • To maximize Marginal Value Product hire 1
  • To maximize profits, hire 3.
  • What does Marginal value product rule say?
  • Hire additional labor so long as marginal value product exceeds the wage.
if this firm maximizes profits by hiring 3 workers the wage must be between
If this firm maximizes profitsby hiring 3 workers, the wage must be between:
  • $40 and $60
  • $85 and $120
  • $60 and $100
  • $60 and $80
  • $100 and $113.33
why is this
Why is this?
  • According to the marginal profit rule,

Firm should add workers so long as marginal value product of labor exceeds wage.

Marginal value product of third laborer is $60, marginal value product of 4th is $40. If wage is between $40 and $60, it pays to add third laborer, but not a 4th.