Question

The cookie company in the mall hires only labor to produce cookies. The workers are paid $70 per day, and the cost of renting the space in the mall is $300 per day.

Number of workers	Daily output (cookies)
1	200
2	400
3	600
4	700

The daily fixed costs of production are

Choose one:A.   $300 .B.   $370 .C.   $140 .D.   $70 .E.   $0.

The labor cost per day of hiring two workers is   $  .

The total cost per day when three workers are hired is   $  .

The marginal product per day of the fourth worker is     cookies.

Answer 1

Fixed cost of production = $300

Cost of per labour =$70

1) Daily fixed cost of production is cost of rent so fixed cost of production =$300

Correct answer is A

2) Labour cost of hiring two worker per day (2×$70) =$ 140

3) total cost of hiring three worker per day labour cost(3×$70) =$ 210

Fixed cost =$300

Total cost =$210+ $300 = $510

4) Marginal productivity at 4th labour

= TP at 4 worker - TP at 3 worker

= 700-600

= 100

Marginal productivity at 4th worker =$100