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2. Assume that men and women can do fruit-picking. Both expose the same productivity. The production function for fruit-picking is: Q = 100(LmLw) Where Lm if the level of employment for men and Lw is the women's employment level. Consider Wm $20, as the wage paid to men, Ww = MPLm = 100Lw, and MPLW = 100Lm = $20, the wage paid to women, a) Find the LA - Lc ratio. Explain the interpretation of this ratio. b) Due to new policies, the Ww rise to $40. Show the substitution effect. c) If this firm wants to pick 40,000 fruits, how many men and women will be employed? Consider $20 as a wage for women and men.

2. Assume that men and women can do fruit-picking. Both expose the same productivity. The production function for fruit-picking is: Q = 100(LmLw) Where Lm if the level of employment for men and Lw is the women's employment level. Consider Wm $20, as the wage paid to men, Ww = MPLm = 100Lw, and MPLW = 100Lm = $20, the wage paid to women, a) Find the LA - Lc ratio. Explain the interpretation of this ratio. b) Due to new policies, the Ww rise to $40. Show the substitution effect. c) If this firm wants to pick 40,000 fruits, how many men and women will be employed? Consider $20 as a wage for women and men.

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter4: Demand And Supply: Applications And Extensions
Section: Chapter Questions
Problem 12CQ
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2. Assume that men and women can do fruit-picking. Both expose the same productivity. The production function for fruit-picking is: Q = 100(LmLw) Where Lm if the level of employment for men and Lw is the women's employment level. Consider Wm $20, as the wage paid to men, Ww = MPLm = 100Lw, and MPLW = 100Lm = $20, the wage paid to women, a) Find the LA - Lc ratio. Explain the interpretation of this ratio. b) Due to new policies, the Ww rise to $40. Show the substitution effect. c) If this firm wants to pick 40,000 fruits, how many men and women will be employed? Consider $20 as a wage for women and men.
Transcribed Image Text:2. Assume that men and women can do fruit-picking. Both expose the same productivity. The production function for fruit-picking is: Q = 100(LmLw) Where Lm if the level of employment for men and Lw is the women's employment level. Consider Wm $20, as the wage paid to men, Ww = MPLm = 100Lw, and MPLW = 100Lm = $20, the wage paid to women, a) Find the LA - Lc ratio. Explain the interpretation of this ratio. b) Due to new policies, the Ww rise to $40. Show the substitution effect. c) If this firm wants to pick 40,000 fruits, how many men and women will be employed? Consider $20 as a wage for women and men.
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