Rufus Runs a Skunk-Skinning Service in West Virginia

question 135

Essay

Rufus runs a skunk-skinning service in West Virginia.He employs skinners at a wage rate of $240 a week for each one.He leases the shack where his workers work for $200 per week.The rent is fixed for the next two years.Last week his 10 employees managed to skin a total of 300 skunks.
a.What is the average product of labor for Rufus's company?
b.What is Rufus' total variable cost per week?
c.What is the average variable cost for Rufus's company?
d.If Rufus adds his brother Jethro to his staff,at a wage rate of $240 a week,and his company can now skin 310 skunks per week,what is Rufus's new average variable cost?

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Definitions:

Offeree

The person or entity to whom an offer is made in contract law.

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Producing a decided, decisive, or desired effect, often used to describe rules, policies, or products that achieve their goals.

Lefkowitz V. Great Minneapolis

A landmark case in contract law where it was ruled that an advertisement giving specific details to the public constitutes a binding offer which when accepted completes a contract.

Advertisement

Public communication that promotes the features, advantages, and qualities of a product, service, or brand.