5. Problems and Applications Q5 1. Initial Demand and Equilibrium Q = 120L-L² 120-2Z 2. New Output Price MPL 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 Q 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 3. Crop Destruction What is each orchard's labor demand as a function of the daily wage W? L=2,400-5W OL=60-0.125W What is the market's labor demand? STEP: 2 of 3 OL=2,400-10W OL=2,400-5W OL=120-10W 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 firm's only costs.) workers and makes a profit of $ per day. (Note: Assume

5. Problems and Applications Q5 1. Initial Demand and Equilibrium Q = 120L-L² 120-2Z 2. New Output Price MPL 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 Q 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 3. Crop Destruction What is each orchard's labor demand as a function of the daily wage W? L=2,400-5W OL=60-0.125W What is the market's labor demand? STEP: 2 of 3 OL=2,400-10W OL=2,400-5W OL=120-10W 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 firm's only costs.) workers and makes a profit of $ per day. (Note: Assume

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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