a. Derive the short-run labour demand curve of an individual competitive firm. Be sure to state all of your assumptions clearly. b. Illustrate this demand curve in a carefully labeled diagram. c. Suppose that a technological innovation allows firms to produce more output with the same amount of capital and labour. How does this affect the firm's short-run labour demand curve? Explain with reference to your derivation and assumptions in part a. d. Illustrate the effect of this technological innovation on the labour demand curve using your diagram in b. **please make the diagram**

a. Derive the short-run labour demand curve of an individual competitive firm. Be sure to state all of your assumptions clearly. b. Illustrate this demand curve in a carefully labeled diagram. c. Suppose that a technological innovation allows firms to produce more output with the same amount of capital and labour. How does this affect the firm's short-run labour demand curve? Explain with reference to your derivation and assumptions in part a. d. Illustrate the effect of this technological innovation on the labour demand curve using your diagram in b. please make the diagram

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Economics Modify the Lewis model and assume that there is a strictly positive marginal product of labor in the traditional sector. Use figures with production functions in the traditional and the modern sectors to show what the equilibrium is when no one wants to move away from agriculture. What assumptions do you have to make about production functions to arrive at the conclusion that fewer people will end up in agriculture? Use the same starting point as in the above question. Derive the demand for labor in the traditional and in the modern sectors. Show graphically what the characteristics of the equilibrium would look like when no one wants to change sectors.
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which of the following statements is true? 1. if the marginal product of labour is higher than the marginal product of capital, then the firm uses more labour than capital in the short run. 2.if the wage rate for labour is lower than the cost of capital, then the firm uses more labour than capital in the short run. 3. if for a given amount of initial capital, the production functions means more labour is needed than capital, then the firm uses more labour than capital in the short run. 4. if for a given amount of initial labour, the production function means that more labour is needed than capital, then the firm uses more labour than capital in the short run.
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Mainly concerned with how to answer part b.
Consider the following production function: Q = 3K + 6L where K is Capital, L is Labour and Q represents output. What kind of production function (perfect substitutes, imperfect substitutes, perfect complements etc) does this equation represent? Explain your answer clearly.