Edexcel A-Level Economics A2 QS6 Revenue, Cost and Profit Calculations

Edexcel A-Level Economics A2 QS6 Revenue, Cost and Profit Calculations
Pearson Edexcel International Advanced Subsidiary/Advanced Level in Economics, Issue 2, June 2018Economics XEC11/YEC11

Practise Edexcel A-Level Economics cost calculations by working out marginal cost when a wage rise applies to all workers.

How this is tested

  • Calculate marginal cost when hiring one extra worker raises the wage for all existing workers.
  • Avoid treating the wage rise as only the extra worker cost when total wage costs change.

Question 4

[Maximum number: 1]

A car manufacturer employs 40 engineers at a wage rate of $ 570 per week. To attract an additional worker, the car manufacturer must raise the wage rate for all engineers to $590 per week.

What is the marginal cost of employing this additional worker?

A

$ 20

B

$ 820

C

$ 1390

D

$ 24190