LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 11, Problem 13P
To determine
Determine why an employer may or may not want to pay employees by the piece to accomplish the given tasks.
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Question 2. Company XYZ produces and sells widgets. Production is done at two separate factories, one in
Mississauga and one in Scarborough.
An analysis reveals that in the Mississauga location, it costs
1
= 59³+10000 (dollars)
50%
to produce q widgets in a month, while in the Scarborough location it costs
Cs(q) =q² + 20000 (dollars)
СM (9)
to produce q widgets in a month.
The company needs to fulfill orders for a total of 400 widgets in the month of March 2023.
(a) How many widgets should each location be assigned to produce so that the total cost of production is minimized?
(b) Due to differences in quality control and shipping costs, company XYZ decides to sell widgets produced at
each factory at different price levels: widgets produced in Mississauga are to be sold for $2000 each, and widgets
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The table shows the quantity of gold bars (in thousands) and the extraction cost per gold bar (in dollars) for the Acme Company. Use these data to answer the questions below.
Quantity of Gold Bars (thousands)
Extraction Cost ($ per bar)
0
30,000
1
35,000
2
40,000
3
45,000
4
50,000
5
55,000
Instructions: Enter your answers as a whole number.
a. If the user cost is $10,000 and the current price of a gold bar is $55,000, how many bars (in thousands) should Acme Company extract and sell this year in order to maximize profits?
bars
b. Now suppose that the user cost decreases by $5,000 such that the new user cost is $5,000, but the price remains the same. How many bars (in thousands) should Acme Company extract and sell this year in order to maximize profits?
bars
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
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