Table 17-5 -Refer to Table 17-5.Oil Can Harry's, a New Automobile Service

question 251

Essay

Table 17-5

-Refer to Table 17-5.Oil Can Harry's, a new automobile service shop, is ready to start hiring.The table above shows the relationship between the number of mechanics the firm hires and the quantity of oil changes it produces.
a.Suppose the price of an oil change is $20.Complete the table by filling in the values for marginal product and marginal revenue product.
b.Oil Can Harry's is an input price-taker.Suppose the wage paid to mechanics is $80 per day.What is the profit-maximizing number of mechanics?
c.Suppose the wage rate rises to $100 per day.
(i) What happens to the firm's demand curve for mechanics?
(ii) What happens to the profit-maximizing quantity of mechanics?
d.Suppose the wage rate is $60 per day and the price of an oil change is now $15.
(i) What happens to the firm's demand curve for mechanics?
(ii) What happens to the profit-maximizing quantity of mechanics?

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Definitions:

Alfred Adler

Austrian psychiatrist and founder of the school of individual psychology, noted for his concepts of inferiority complex and the importance of feelings of inadequacy.

Self-efficacy

A person's belief in their own ability to succeed in specific situations or accomplish a task.

Personal Evaluation

An assessment of one's own abilities, characteristics, or performance, often in comparison to others or to personal standards.

Deterministic

The philosophical belief that all events, including moral choices, are completely determined by previously existing causes.