Question

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

Answer 1

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

Answer 2

Yup

Answer 3

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

Answer 4

So it would be 610-600/51-50 right? Which would be 10/1 right? Well, the answer isn't $10 :(

Answer 5

That's what's bugging me.. the answer is actually $1110, and I don't know how to get to that.

Answer 6

ll be $10/1 so mrgcst=$10

Answer 7

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..

Answer 8

\[Marginal \ cost =\frac{ Change \ i n \ total \ cost }{Change \ i n \ output }=\frac{ \Delta TC }{ \Delta q }\]

Answer 9

Yes, thanks... but that doesn't help :(

Answer 10

I know that :P

Answer 11

Well i guess the labour is increasing by 1/>

And it goes from 600-610

So,

10 $

Therfore,


10 /1=10

Answer 12

The answer is $1110... I thought it was also $10...

Answer 13

Are you sure it is $ 1110 ?

Answer 14

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

Answer 15

brb

Answer 16

Sure

Answer 17

its barely to knw

Answer 18

Yuppie i got it :D

Answer 19

How?!

Answer 20

It is easy :P

Answer 21

So say it!!!

Answer 22

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 $

Answer 23

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?

Answer 24

My friend who is doing his BBA at LSE.

Answer 25

What's BBA?

Answer 26

Bachelor's in Business Administration.

Answer 27

good ideal @hba

Answer 28

Whaaaat :o

Answer 29

thankx 4 assist

Answer 30

Welcome :)

Answer 31

Yeah, this helped a lot!!!. Still going to have to watch my back with examiners

Answer 32

Best of luck with that :)

Answer 33

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

Answer 34

^ Yeah that is correct :)