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The following table depicts the number of grapes that can be picked in an hour with varying amounts of labor.

Instructions: In the table, round your responses to two decimal places. In part (b), enter your response as a whole number. If you are entering any negative numbers, be sure to include a negative sign [tex]$(-)$[/tex] in front of those numbers.

a. Assuming that the price of grapes is [tex]\$3.50[/tex] per flat, calculate total revenue and marginal revenue product (MRP).

\begin{tabular}{|c|c|c|c|c|c|}
\hline
\begin{tabular}{l}
Number of Pickers \\
(per Hour)
\end{tabular} & \begin{tabular}{l}
Output of Grapes \\
(Flats per Hour)
\end{tabular} & \begin{tabular}{l}
Price of Grapes \\
( $\[tex]$ per Flat)
\end{tabular} & \multicolumn{2}{|c|}{\begin{tabular}{l}
Total Revenue \\
( $\$[/tex] per Hour)
\end{tabular}} & \begin{tabular}{l}
Marginal Revenue Product \\
(MRP) ( [tex]$\$[/tex]$ per Hour)
\end{tabular} \\
\hline
0 & 0 & 3.50 & 0 & 0 & \\
\hline
1 & 10 & 3.50 & 35.00 & 35.00 & \\
\hline
2 & 28 & 3.50 & 98.00 & 63.00 & \\
\hline
3 & 43 & 3.50 & 150.50 & 52.50 & \\
\hline
4 & 54 & 3.50 & 189.00 & 38.50 & \\
\hline
5 & 61 & 3.50 & 213.50 & 24.50 & \\
\hline
6 & 64 & 3.50 & 224.00 & 10.50 & \\
\hline
7 & 65 & 3.50 & 227.50 & 3.50 & \\
\hline
8 & 61 & 3.50 & 213.50 & -14.00 & \\
\hline
\end{tabular}

b. How many pickers will be hired if the going wage rate is [tex]\$10.50[/tex] per hour?

[tex]$\qquad$[/tex] picker(s)



Answer :

GinnyAnswer
To determine the total revenue and marginal revenue product (MRP) for the grape picking process, we will follow these steps:

### Step 1: Calculate Total Revenue
Total revenue is calculated by multiplying the output of grapes (in flats) by the price per flat of grapes ([tex]$3.50). ### Step 2: Calculate Marginal Revenue Product (MRP) The MRP is calculated by finding the change in total revenue as we add one more grape picker. Given information: - Price per flat of grapes = $[/tex]3.50
- Wage rate per hour = [tex]$10.50 ### Table Completion Let's fill in the table with the given values and perform the necessary calculations: \[ \begin{array}{|c|c|c|c|c|c|} \hline \text{Number of Pickers} & \text{Output of Grapes} & \text{Price of Grapes} & \text{Total Revenue} & \text{Total Revenue} & \text{MRP} \\ \text{(per Hour)} & \text{(Flats per Hour)} & \text{( \$[/tex] per Flat)} & & & \text{( \[tex]$ per Hour)} \\ \hline 0 & 0 & 3.50 & 0.00 & 0.00 & 0 \\ \hline 1 & 10 & 3.50 & 10 \times 3.50 = 35.00 & 35.00 & 35.00 \\ \hline 2 & 28 & 3.50 & 28 \times 3.50 = 98.00 & 98.00 & 98 - 35 = 63.00 \\ \hline 3 & 43 & 3.50 & 43 \times 3.50 = 150.50 & 150.50 & 150.50 - 98 = 52.50 \\ \hline 4 & 54 & 3.50 & 54 \times 3.50 = 189.00 & 189.00 & 189 - 150.50 = 38.50 \\ \hline 5 & 61 & 3.50 & 61 \times 3.50 = 213.50 & 213.50 & 213.50 - 189 = 24.50 \\ \hline 6 & 64 & 3.50 & 64 \times 3.50 = 224.00 & 224.00 & 224 - 213.50 = 10.50 \\ \hline 7 & 65 & 3.50 & 65 \times 3.50 = 227.50 & 227.50 & 227.50 - 224 = 3.50 \\ \hline 8 & 61 & 3.50 & 61 \times 3.50 = 213.50 & 213.50 & 213.50 - 227.50 = -14.00 \\ \hline \end{array} \] ### Part b: Determine the Number of Pickers to be Hired To determine the number of pickers that should be hired if the wage rate is $[/tex]10.50 per hour, we need to compare the MRP to the wage rate. The firm will hire pickers until the MRP is at least equal to the wage rate.

From the table, we see that the number of pickers where the MRP remains greater than or equal to [tex]$10.50 is up to 6 pickers (since MRP at 6 pickers is exactly $[/tex]10.50).

Given these calculations,

The number of pickers to be hired is: 6 pickers.

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