## order 2 years ago To increase its labour force from 50 to 51 workers, a firm has to increase the daily wage rate from $600 to$610. What is the marginal cost of labour per day? A $10 B$510 C $610 D$1110

1. mustry

as u knw marginal cost =change in total cost/change in labour

2. order

Yup

3. mustry

so ll be mrgc=($610-$600)/(51-50)

4. order

So it would be 610-600/51-50 right? Which would be 10/1 right? Well, the answer isn't $10 :( 5. order That's what's bugging me.. the answer is actually$1110, and I don't know how to get to that.

6. mustry

ll be $10/1 so mrgcst=$10

7. order

It's an advanced level question... so it's not meant to be that easy, and the answer isn't that... so I don't know..

8. hba

$Marginal \ cost =\frac{ Change \ i n \ total \ cost }{Change \ i n \ output }=\frac{ \Delta TC }{ \Delta q }$

9. order

Yes, thanks... but that doesn't help :(

10. hba

I know that :P

11. hba

Well i guess the labour is increasing by 1/> And it goes from 600-610 So, 10 $Therfore, 10 /1=10 12. order The answer is$1110... I thought it was also $10... 13. hba Are you sure it is$ 1110 ?

14. order

Pretty sure, yeah, but not sure how to get to that answer...

15. hba

brb

16. order

Sure

17. mustry

its barely to knw

18. hba

Yuppie i got it :D

19. order

How?!

20. hba

It is easy :P

21. order

So say it!!!

22. hba

The wage rate is actually per labour So, Lets calculate 1=(600 * 50) Now lets calculate the new one. 2=(610*51) Now to calculate marginal cost Subtract them :) So, (610*51)-(600*50) =31,100-30,000=1,100 $23. order Tricky examiners!!!! Come, on, you would have gone with$10 at first glance... that's how they want students to fail!!! Thanks for pointing it out though... and they weren't specific with it being one labour's wage xD How did you figure that out?

24. hba

My friend who is doing his BBA at LSE.

25. order

What's BBA?

26. hba

27. mustry

good ideal @hba

28. hba

Whaaaat :o

29. mustry

thankx 4 assist

30. hba

Welcome :)

31. order

Yeah, this helped a lot!!!. Still going to have to watch my back with examiners

32. hba

Best of luck with that :)

33. phi

I have not studied economics, but I would not overthink this problem 50 to 51 workers, a firm has to increase the daily wage rate from $600 to$610. What is the marginal cost of labour per day? the original cost per day is 50*600= 30000 the new cost per day is 51*610= 31110 So it looks like it costs \$1110 per day to add 1 person

34. hba

^ Yeah that is correct :)