## anonymous 3 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. anonymous

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

2. anonymous

Yup

3. anonymous

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

4. anonymous

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

6. anonymous

ll be $10/1 so mrgcst=$10

7. anonymous

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. anonymous

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. anonymous The answer is$1110... I thought it was also $10... 13. hba Are you sure it is$ 1110 ?

14. anonymous

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

15. hba

brb

16. anonymous

Sure

17. anonymous

its barely to knw

18. hba

Yuppie i got it :D

19. anonymous

How?!

20. hba

It is easy :P

21. anonymous

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. anonymous 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. anonymous

What's BBA?

26. hba

27. anonymous

good ideal @hba

28. hba

Whaaaat :o

29. anonymous

thankx 4 assist

30. hba

Welcome :)

31. anonymous

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 :)