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- 4. For each of the following production functions, write the equation and graph the supply curve of the firm if w=20 and r=50 When the price of output is $20, how much will the firm offer to the market and what are the profits of the firm? a. Q = 10 K^.2L^.5B^.1 in the long-run with capital flexible. B is the amount of Building Space employed, which is held fixed at 1 unit in both the long-run and the short-run and has a price of $100 per unit. b. Q= (4K^.6 + 8L^.6)^ 1.25A firm's resource input, total output of labor, and product price schedules are given in the table. If labor is the only variable input, how much labor should the firm employ if the wage rate is $15 per day? Units of Labor Total Output/Day 20 30 2 3 4 5 6 7 * 3 units *4 units *5 units *6 units 38 46 54 62 Price of Good ($) $10 9 8 7 6 513. Identify which way the labor supply curve would shift under the following scenarios. A country experiences a huge influx of immigrants who are skilled in the textile industry. Wages increase in an industry that requires similar job skills. New machines require additional maintenance over time, so that the marginal productivity of labor rises.
- 4. Consider a firm producing output, Q, using labour, Land capital, K as the two inputs, where the price of labour is w = 40 and the price of capital is r = 50. The firm's total costs are TC = £10,000. Assume that the production technology to produce the output is given by: Q = 20L + 30K (a) What will be the firm's optimal choice of inputs? Referring to marginal product and input prices, explain why this is the optimum point.3. Optimal use of multiple inputs. In his shop, Jim Valenti retrofits sunroofs into automobiles. The process can use a combination of skilled labor and unskilled labor. Given his current mix of employees, the marginal product of the last unit of skilled labor is 4 sunroofs per day, and the marginal product of the last unit of unskilled labor is 1 sunroof per day. Current market rates for skilled and unskilled labor is $40 and $20, respectively. Is Julian using a least cost combination of inputs? If not, which of type of labor should he use relatively more? Comparison Expression: Result:Suppose that the demand for loanable funds for car loans in the Milwaukee area is $12 million per month at an interest rate of 10 percent per year, $13 million at an interest rate of 9 percent per year, $14 million at an interest rate of 8 percent per year, and so on. If the supply of loanable funds is fixed at $16 million, what will be the equilibrium interest rate? Instructions: Enter your answer as a whole number. * percent per year
- The idea of "economic rent" can be applied to resources other than land. What is economic rent? O The additional "pay" the owner of a resource can earn greater than its "supply price." It's when supply is greater than demand. |0|0|0 O It applies to apartment rent in large cities where rents are outrageous. OIt refers to ridiculously high taxes on entrepreneurs.Provide a diagram showing the inefficient or underemployed resources in a hypothetical economyQuestion 54 Answer the next question(s) on the basis of the following marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Inputs Inputs of a MPa of b 1 25 1 2 20 2 36 TITI 3 15 3 4 10 4 2 6 1 7 Reference REF27111 40 32 24 20 16 Refer to the above data. Assuming the prices of resources a and bare $5 and $8 respectively, what is the least costly combination of resources for the firm to employ in producing 192 units of output? a) 2 of a and 6 of b b) 4 of a and 3 of b c) 6 of a and 2 of b d) 3 of a and 4 of b
- Why is the development of markets critical in the context of division of labor? 1.Unless a market develops for the exchange of the surplus of goods and services that are produced by virtue of division of labor would not be realized. 2.As the level of output increases because of division of labor, enabling further advantages in economies of scale, which results in the reduction of the average cost per unit of the produced and exchanged good, would not be realized. 3.Division of labor leads to specialization thus increasing productivity. Specialization in turn leads to inventions that increase productivity and thus output. If there were no markets for the goods and services that is produced neither specialization, nor inventions. 4.All the of the above are correct.Catalog and Study Tools Rental Options College Success Tips Career Success Tips ? Help Give Feedback 5. Problems and Applications Q5 1. Initial Demand and Equilibrium 2. New Output Price Q = 120L-L² MPL = 120- 2L The nation of Ectenia has 40 competitive apple orchards, which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: where is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor. Suppose the world price of apples doubles to $4 per apple. OL=60-0.25W OL=120-2W What is each orchard's labor demand as a function of the daily wage W? OL= 2,400-5W OL=60-0.125W 3. Crop Destruction What is the market's labor demand? OL= 2,400 10W OL= 2,400-5W OL=120 - 10W STEP: 2 of 3 OL=60-0.125W Ectenia has 200 workers who supply their labor inelastically. The equilibrium wage is $ per worker per day. Each orchard hires. that wages are the…2