11. Suppose that the production function is Y=K^(0.5) N^(0.5). With thisproduction function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5).The capital stock is K=100. The labor supply curve is NS=100(w^2), where w isthe real wage and NS denotes the quantity of labor supplied. Compute theequilibrium level of employment (N).12. Consider Question 11 again. Compute the level of full-employment output(Y). Approximate your answer to the next integer.13. Consider Question # 11 again. Due to a temporary reduction in immigration,the economy's labor supply curve changes to NS=90(w^2). A policy makersuggests that in order to increase full-employment output in response to thereduction in immigration the government might temporarily subsidize the firm'slabor cost by paying a fractions of the wage it pays to a worker. That is, if thereal wage received by a worker is w, the firm only pays a portion (1-s)w with theremaining sw coming from the government. Compute the subsidy s that wouldmake the level of full employment (N) in the economy with reduced immigrationequal to the level of full employment of the economy in Question # 11. Enteryour answer in percent with one decimal and without the % symbol.

Unemployment can be defined in several ways, each capturing different aspects of the concept. Here…

11. Suppose that the production function is Y=K^(0.5) N^(0.5). With this production function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5). The capital stock is K-100. The labor supply curve is NS=100(w^2), where w is the real wage and NS denotes the quantity of labor supplied. Compute the equilibrium level of employment (N). 12. Consider Question 11 again. Compute the level of full-employment output (Y). Approximate your answer to the next integer.

11. Suppose that the production function is Y=K^(0.5) N^(0.5). With this production function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5). The capital stock is K-100. The labor supply curve is NS=100(w^2), where w is the real wage and NS denotes the quantity of labor supplied. Compute the equilibrium level of employment (N). 12. Consider Question 11 again. Compute the level of full-employment output (Y). Approximate your answer to the next integer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following statements best describes a production function? Group of answer choices all levels of inputs that could produce a given level of output the maximum profit generated from given levels of inputs the maximum level of output generated from given levels of inputs all levels of output that can be generated from given levels of inputs
In Example 6.4, wheat is produced according to the production function: | = 100 (K°-$L05). Beginning with a capital input of 4 and a labor input of 49, show that the marginal product of labor and the marginal product of capital are both decreasing. (Round your responses to two decimal places.) The MPK at 5 units of capital is 156.52. The MPK at 6 units of capital is 142.89 The MP, at 50 units of labor is 14.14. The MP, at 51 units of labor is 14. Does this production function exhibit increasing, decreasing, or constant returns to scale? A. Decreasing returns to scale because the inputs exhibit diminishing marginal returns. B. Increasing returns to scale because the inputs exhibit diminishing marginal returns. C. Constant returns to scale because a proportionate increase in all inputs results in the same proportionate increase in output.
Suppose that a firm's production function is Cobb-Douglas (Y = A K\alpha L1 - \alpha) with parameter a \alpha = 0.4. a) What fractions of income do capital and labor receive? b) Suppose that number of the labor increases by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage? c) Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage? d) Suppose that a technological advance raises the value of the parameter A by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage?
Suppose that q = 40, L = 5, and K= 10 is a point on the production function q=f(L, K). Is it posssible for q = 40, L = 5, and K = 11 to also be a point on this production function? Why or why not? The combination q =40, L = 5, and K=11 A. cannot be a point because we assume production functions are comprised of fixed inputs. B. can be a point because we assume production functions hold technology constant. C. cannot be a point because we assume production functions are efficient. D. cannot be a point because we assume production functions represent the short run. E. can be a point because we assume production functions exhibit diminishing returns.
If the production function for GDP is Cobb-Douglas in labour and capital, with the exponent on capital is a space equals space 1 third, and assuming constant returns to scale, and a perfectly competitive goods market a. The marginal product of labour (vertical axis) will have a positive, concave slope when plotted against labour (horizontal axis) b. In equlibrium, wage will equal 2 over 3 y, where y is output per worker c. Labour and capital are complements so the derivative fraction numerator d squared Y over denominator d L d K end fraction less than 0 d. None of the answers is correct e. The marginal product of labour is: left parenthesis 1 minus a right parenthesis A open parentheses Lover K close parentheses to the power of a
Suppose there are two goods beverage and pizza and two inputs land, T, and labor, L. Given atb=5001, atp=994, alb-2484, alp=1980,T=5640, and L=4980. What is the amount of pizza at the point of intersection between land and labor constraints. (Answer should have two decimal places). Your Answer: Answer
D, e and f
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Given the following Constant Elasticity of Substitution production function, show whether or not it is homogeneous, and the scale it exhibits. Q= [L^2 + K^3]^2/3
correct Question 4 Consider the production function F (K, L) = 9 K+10L. Assuming the market for labor is perfectly competitive, the real wage is equal to 0.6
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