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

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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

Economics - Financial Markets
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as u knw marginal cost =change in total cost/change in labour
Yup
so ll be mrgc=($610-$600)/(51-50)

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So it would be 610-600/51-50 right? Which would be 10/1 right? Well, the answer isn't $10 :(
That's what's bugging me.. the answer is actually $1110, and I don't know how to get to that.
ll be $10/1 so mrgcst=$10
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..
  • hba
\[Marginal \ cost =\frac{ Change \ i n \ total \ cost }{Change \ i n \ output }=\frac{ \Delta TC }{ \Delta q }\]
Yes, thanks... but that doesn't help :(
  • hba
I know that :P
  • hba
Well i guess the labour is increasing by 1/> And it goes from 600-610 So, 10 $ Therfore, 10 /1=10
The answer is $1110... I thought it was also $10...
  • hba
Are you sure it is $ 1110 ?
Pretty sure, yeah, but not sure how to get to that answer...
  • hba
brb
Sure
its barely to knw
  • hba
Yuppie i got it :D
How?!
  • hba
It is easy :P
So say it!!!
  • 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 $
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?
  • hba
My friend who is doing his BBA at LSE.
What's BBA?
  • hba
Bachelor's in Business Administration.
good ideal @hba
  • hba
Whaaaat :o
thankx 4 assist
  • hba
Welcome :)
Yeah, this helped a lot!!!. Still going to have to watch my back with examiners
  • hba
Best of luck with that :)
  • 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
  • hba
^ Yeah that is correct :)

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