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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

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  1. mustry
    • 2 years ago
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    as u knw marginal cost =change in total cost/change in labour

  2. order
    • 2 years ago
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    Yup

  3. mustry
    • 2 years ago
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    so ll be mrgc=($610-$600)/(51-50)

  4. order
    • 2 years ago
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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 :(

  5. order
    • 2 years ago
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    That's what's bugging me.. the answer is actually $1110, and I don't know how to get to that.

  6. mustry
    • 2 years ago
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    ll be $10/1 so mrgcst=$10

  7. order
    • 2 years ago
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    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
    • 2 years ago
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    \[Marginal \ cost =\frac{ Change \ i n \ total \ cost }{Change \ i n \ output }=\frac{ \Delta TC }{ \Delta q }\]

  9. order
    • 2 years ago
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    Yes, thanks... but that doesn't help :(

  10. hba
    • 2 years ago
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    I know that :P

  11. hba
    • 2 years ago
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    Well i guess the labour is increasing by 1/> And it goes from 600-610 So, 10 $ Therfore, 10 /1=10

  12. order
    • 2 years ago
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    The answer is $1110... I thought it was also $10...

  13. hba
    • 2 years ago
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    Are you sure it is $ 1110 ?

  14. order
    • 2 years ago
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    Pretty sure, yeah, but not sure how to get to that answer...

  15. hba
    • 2 years ago
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    brb

  16. order
    • 2 years ago
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    Sure

  17. mustry
    • 2 years ago
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    its barely to knw

  18. hba
    • 2 years ago
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    Yuppie i got it :D

  19. order
    • 2 years ago
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    How?!

  20. hba
    • 2 years ago
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    It is easy :P

  21. order
    • 2 years ago
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    So say it!!!

  22. hba
    • 2 years ago
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    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
    • 2 years ago
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    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
    • 2 years ago
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    My friend who is doing his BBA at LSE.

  25. order
    • 2 years ago
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    What's BBA?

  26. hba
    • 2 years ago
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    Bachelor's in Business Administration.

  27. mustry
    • 2 years ago
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    good ideal @hba

  28. hba
    • 2 years ago
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    Whaaaat :o

  29. mustry
    • 2 years ago
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    thankx 4 assist

  30. hba
    • 2 years ago
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    Welcome :)

  31. order
    • 2 years ago
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    Yeah, this helped a lot!!!. Still going to have to watch my back with examiners

  32. hba
    • 2 years ago
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    Best of luck with that :)

  33. phi
    • 2 years ago
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    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
    • 2 years ago
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    ^ Yeah that is correct :)

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