Practice Problem for Economic Growth
1. Fill out the chart below:
The firm has fixed capital of 3 stoves.
Labor is variable.
How many workers should the firm hire?
What is the firm's greatest profit margin?
How many burgers does the firm need to sale in order to break even?
Draw the production function.
| Per Hour | $ 2.50 | ||||||||
| # of Workers | Quantity of Burgers | Marginal Productivity | Price | Total Revenue | Wage | VC | TC | FC | Profit |
| 0 | 0 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 1 | 5 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 2 | 15 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 3 | 26 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 4 | 38 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 5 | 51 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 6 | 67 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 7 | 69 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 8 | 3 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 9 | -5 | $4.00 | $ 6.00 | $ 1.00 | $ - | ||||
| 10 | -18 | $4.00 | $ 6.00 | $ 1.00 | $ - |