Question

Macroeconomics

Posted 3 months ago

```
A single firm in Aluminum Valley hires computer coders. The market supply of computer coder labor is given here.
\begin{tabular}{lll}
Wage (per hour) & Quantity of labor supplied & Total cost of labor \\
\hline$\$ 10$ & 1 & $\$ 10$ \\
$\$ 20$ & 2 & $\$ 40$ \\
$\$ 30$ & 3 & $\$ 90$ \\
$\$ 40$ & 4 & $\$ 160$ \\
$\$ 50$ & 5 & $\$ 250$
\end{tabular}
What is the marginal factor cost of the fifth worker?
Choose 1 answer:
(A) $\$ 10$
(B) $\$ 90$
(C) $\$ 70$
(D) $\$ 50$
(E) $\$ 250$
```

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Answer from Sia

Posted 3 months ago

Solution

a

Marginal Factor Cost (MFC) Definition: The MFC is the additional cost to a firm of hiring one more unit of labor

b

Calculation of MFC for the fifth worker: To find the MFC for the fifth worker, we look at the increase in total cost of labor when the fifth worker is hired. The total cost for four workers is $160, and for five workers, it is$250. The MFC for the fifth worker is the difference between these two total costs

c

Mathematical Expression: MFC = Total Cost for 5 workers - Total Cost for 4 workers = \$250 - \$160 = \$90

Answer

(B) $90

Key Concept

Marginal Factor Cost (MFC)

Explanation

The MFC for the fifth worker is the additional cost incurred from hiring that worker, which is calculated by the change in total cost of labor.

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