6. Study Questions and Problems #5The supply curve of labor facing a single firm isbecause any individual firmbut the market supply curve of labor isinfluence the wage in the labor market.This is AttemptsAverage / 16. Study Questions and Problems #5The supply curve of labor facing a single firm isbecause any individual firmupward slopinghorizontaldownward slopinginfluence the wage in the labor market.but the market supply curve of labor isThis is

Understanding Labor Supply Curves: Individual Firm vs. Market DynamicsThe labor market, like any…

Answered: 6. Study Questions and Problems #5 The…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5 Question 5 A bottling company uses two inputs to produce bottles of the soft drink Dr Pibb; bottling machines, K, and workers, L. The firm's production function exhibits diminishing MRTS. At its current level of production, the firm spends 800 per day on machinery and 200 per day paying wages to its workers. At this level of production, the marginal product of the machine is an additional 200 bottles per day and the marginal product of labor is 50 more bottles per day. Is this firm producing at minimum cost? If it is minimizing cost, explain why. If it is not minimizing cost, explain how the firm can lower its cost.
Number of Workers Output 0 0 1 10 2 30 3 38 4 41 5 42 Diminishing marginal product begins with the addition of the Question 7 options: a) second worker b) third worker c) fourth worker d) fifth worker
4. Profit maximization in the cost-curve diagram The following graph plots daily cost curves for a firm operating in the competitive market for demin overalls. Hint: Once you have positioned the rectangle on the graph, select a point to observe its coordinates. 50 45 45 O O 40 35 35 30 PRICE (Dollars per overalls) 20 15 10 5 + 0 0 2 ATC AVC MC 46 8 10 12 14 16 18 20 20 QUANTITY (Thousands of overallses per day) Profit or Loss ?
4
QUESTION 24 Suppose a firm is producing a level of output such that MR > MC. What should the firm do to maximize its profits? O The firm should increase price O The firm should do nothing if it wants to maximize the difference between MR and MC to maximize its profits. O The firm should increase output O The firm should hire less labor QUESTION 25 Click Save and Submit to save and submit. Click Save All Answers to save all answers. DELL
13. 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.
microeconomics
(Figure: Determining Marginal Returns) Based on both the table and the figure, adding a third worker leads to marginal returns. Average Product and Marginal Product Output 1 2 3 14 Labor 5 6 17 12 10 8 6 4 8 9 10 0 -2 BAY constant 2 Total Product O negative 5 12 21 31 40 48 54 57 57 increasing 54 diminishing 4 MP 5 7 9 10 9 8 6 3 0 3 6 Workers AP 5 6 7 7.75 8 8 7.71 7.12 6.33 5.4 8 10 12
B1: COSTS and PROFITS with PERFECT-SUBSTITUTES (d) What do we mean by an exit price? What is the exit price if r = $100 and w = $2000? Explain. (e) Now suppose wages (w) falls. At what value of w will the firm switch from K into L? Use the isocost - isoquant figure to explain. (f) Does a lower w change the exit-price? If so, how? Explain. 1
Table 3 Gallo Cork Factory Number of Workers 1 2 3 4 5 6 7 Number of Machines 2 2 2 2 2 2 2 Output (corks produced per hour) 5 10 20 35 55 70 80 Select one: O a. the fifth worker O b. the fourth worker O c. the third worker O d. the sixth worker Marginal Product of Labor Cost of Cost of Workers Machines Total Cost Refer to Table 3. Gallo's cork factory experiences diminishing marginal product of labor with the addition of which worker?
economics question. answer A
3. There are two profit maximising firms, Alpha Inc. and Beta Ltd. Both use labour, L and capital, K to produce their output, Q and they both employ workers at the minimum wage. Following a government review, the national minimum wage rises from W₁ to W₂. (a) Use an isoquant/isocost diagram to show how this will affect Alpha's optimal choice of inputs, assuming it wants to continue to produce the same output. (b) Following the increase in the wage rate, Alpha Inc. reduces the number of workers employed by significantly more than Beta Ltd. Construct the demand curve for labour for Alpha Inc. and explain how and why its shape will change if you graphed the same curve for Beta Ltd. There is a third firm in this market called Gamma plc. which also uses labour and capital to produce output, where w is the price of labour, r is the price of capital and Q is the output. Suppose that Gamma plc. is a price-taking firm and faces a cost function: 1 1 c(w,r,Q) = — w²r²Q² (c) By deriving an…

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