# Solved Problem in Economics

Topics: Harshad number, Employment, Laborer Pages: 2 (705 words) Published: April 2, 2013
3- The owner of a car wash is trying to decide on the number of people to employ based on the following short production function:
Q = 6 L – 0.5 L²

Where Q = No. of car washes per hour
L = No. of workers

a- Generate a schedule showing TP,AP,MP., then graph it.

L| TPL| MPL| APL|
0| 0| 0| -|
1| 5.5| 5.5| 5.5|
2| 10| 4.5| 5|
3| 13.5| 3.5| 4.5|
4| 16| 2.5| 4|
5| 17.5| 1.5| 3.5|
6| 18| 0.5| 3|
7| 17.5| -0.5| 2.5|
8| 16| -1.5| 2|
9| 13.5| -2.5| 1.5|
10| 10| -3.5| 1|
11| 5.5| -4.5| 0.5|

b- Suppose the price for a basic car wash (no under coating ,no wax treatments etc.) in his area of business is LE 5. How many people should he hire if he pays each worker LE 6 / he.? L| TP| MP| AP| TRP| MRP| TLC| MLC| TRP-TLC| MRP-MLC| 0| 0|  |  | 0|  | 0|  | 0| 0|

1| 5.5| 5.5| 5.5| 27.5| 27.5| 6| 6| 21.5| 21.5|
2| 10| 4.5| 5| 50| 22.5| 12| 6| 38| 16.5|
3| 13.5| 3.5| 4.5| 67.5| 17.5| 18| 6| 49.5| 11.5| 4| 16| 2.5| 4| 80| 12.5| 24| 6| 56| 6.5|
5| 17.5| 1.5| 3.5| 87.5| 7.5| 30| 6| 57.5| 1.5|
6| 18| 0.5| 3| 90| 2.5| 36| 6| 54| -3.5|
7| 17.5| -0.5| 2.5| 87.5| -2.5| 42| 6| 45.5| -8.5| 8| 16| -1.5| 2| 80| -7.5| 48| 6| 32| -13.5|
9| 13.5| -2.5| 1.5| 67.5| -12.5| 54| 6| 13.5| -18.5| 10| 10| -3.5| 1| 50| -17.5| 60| 6| -10| -23.5|
11| 5.5| -4.5| 0.5| 27.5| -22.5| 66| 6| -38.5| -28.5| 12| 0| -5.5| 0| 0| -27.5| 72| 6| -72| -33.5|

* If the price of labor equals 6LE / h , the firm should hire5 workers to reach its maximum profitability of 57,5LE . * Beyond that point the firm would pay more in additional labor cost than it would receive in additional revenue. C- Suppose he consider hiring students on a part time basis for LE 4 \ hr. . Do you think he should hire more students at this lower rate ? Explain. L| TP...