Part OneQuestion 1We are in a specific factor world, and we have two factors of production: labour (L)and Capital (K). We have one country, Poland, and one good, vodka. The labourmarket is competitive and wages are set accordingly. Given the (fixed) supply ofcapital, the Marginal Productivity of labour is as follows:Workers Employed123456789101112MPL of last workeradded in the vodkasector1100100090080070060050040030020010050(a) Draw the Marginal Productivity of labour curve. At a wage of $2000 and vodkaprice of $4, how many units of labour will be employed? Explain. What is the totalwage bill (total payment to labour) and the rent paid to capital?(b) Suppose that wages increase from $2000 to $2400. Calculate the change to thetotal wage bill and the change in capital rents. Who are the winners and losers fromthis wage change?See next page From now on suppose that Poland produces not only vodka, but also olives.(c) The factors of production for olives are labour (L) and Land (T). Given the (fixed)supply of land, the Marginal Productivity of labour is the same as in the table for thevodka sector. Assume that initially the price of vodka (Pv), is equal to the price ofolives (Po). Argue that employment is equalized across industries. What is the effectof a fall in the relative price of vodka (Pv/Po) on the allocation of labour and onoutput? Are there both winners and losers from such a price change? Explain.(d) Suppose that the world relative price of vodka (Pv/Po)w is lower than the relativeprice in Poland (Pv/Po). What will Poland decide to export and to import? Whodefinitely gains and loses from trade?

The ability to produce a certain commodity or service at less of an opportunity cost than its…

Part One Question 1 We are in a specific factor world, and we have two factors of production: labour (L) and Capital (K). We have one country, Poland, and one good, vodka. The labour market is competitive and wages are set accordingly. Given the (fixed) supply of capital, the Marginal Productivity of labour is as follows: Workers Employed 1 2 3 4 5 6 7 8 9 10 11 12 MPL of last worker added in the vodka sector 1100 1000 900 800 700 600 500 400 300 200 100 50 (a) Draw the Marginal Productivity of labour curve. At a wage of $2000 and vodka price of $4, how many units of labour will be employed? Explain. What is the total wage bill (total payment to labour) and the rent paid to capital?

Part One Question 1 We are in a specific factor world, and we have two factors of production: labour (L) and Capital (K). We have one country, Poland, and one good, vodka. The labour market is competitive and wages are set accordingly. Given the (fixed) supply of capital, the Marginal Productivity of labour is as follows: Workers Employed 1 2 3 4 5 6 7 8 9 10 11 12 MPL of last worker added in the vodka sector 1100 1000 900 800 700 600 500 400 300 200 100 50 (a) Draw the Marginal Productivity of labour curve. At a wage of $2000 and vodka price of $4, how many units of labour will be employed? Explain. What is the total wage bill (total payment to labour) and the rent paid to capital?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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.
Suppose you are considering hiring another worker. Also assume that you are at a firm that is operating at a point where the marginal product of labor is 5 and the price of each unit of labor is $2, and the marginal product of capital is 20 and the price of each unit of capital is $10. Should you hire another worker? If you hire another worker, what will happen to the marginal product of labor and why?
7. In Australia the (w) is 10 Australian dollars (AUD) per worker per hour, and the rental price of capital (r) is 2 AUD per machine per hour. Then the wage in units of machines-defined as the amount of machines that could be bought with one hour's wage-is calculated a. by the formula w xr and is equal to 20 machines b. by the formula w/r and is equal to 5 machines c. by the formula w +r and is equal to 12 machines d. by the formula w -r and is equal to 8 machines
Consider the following production diagram: 12 10 A Capital 6 2 0 0 1 Labor 4 For each of the five labeled points (A, B, C, D, and E), determine whether the correct levels of labor and capital are being used. If the correct level is not being used, explain why, and what change should be made. Hint: Start by identifying the optimal point. Being able to compare to the optimal point will assist you in determining the changes that need to be made.
Complete the table: Number of Workers per Day Movie Tickets Produced per Day Average Product Marginal Product Average Price of Movie Tickets Total Value Product Average Value Product Marginal Value Product Price of Worker per Day 0 0 $10.00 $120.00 1 227 $10.00 $120.00 2 615 $10.00 $120.00 3 935 $10.00 $120.00 4 1,185 $10.00 $120.00 5 1,427 $10.00 $120.00 6 1,631 $10.00 $120.00 7 1,788 $10.00 $120.00 8 1,800 $10.00…
(This is a single question with five parts to the answer. I would appreciate help with all five parts if possible. Image screenshot of the original question with the formulas more easily readable than can be identified here is attached) Tech firms produce goods and services from labor and energy. The total cost in dollars to produce y amount of goods and services for each firm j is cj(yj) = yi2. There are 100 identical tech firms which all behave competitively. What is the individual supply of technological goods and services? What is the market supply of technological goods and services? Suppose the demand curve for these goods is D(p)=200-50p. What is the equilibrium price and quantity sold? How much is the total surplus of this economy? Now suppose that the industry makes a one-time investment for $K amount of dollars to innovate in a new technology of production that allows every firm to reduce its cost of production to a 1/4 fraction of the previous cost. What is the new total…
A firm can use three different production technologies, with capital and labor requirements at each level of output as follows: Technology 1 Technology 2 Technology 3 Daily Output 100 150 200 250 K 6 6 7 8 L 10 13 14 16 K 7 789 L 8 10 11 13 K 8 8 9 10 L 7 8 9 11 Suppose the firm is operating in a high-wage country, where capital cost is $110 per unit per day and labor cost is $90 per worker per day. For each level of output, which technology is cheapest? At 100 units of output, is the least expensive.
AMT, Inc., is considering the purchase of a digital camera for the maintenance of design specifications by feeding digital pictures directly into an engineering workstation where computer-aided design files can be superimposed over the digital pictures. Differences between the two images can be noted, and corrections, as appropriate, can then be made by design engineer. The capital investment requirement is P345,000 and the estimated market value of the system after a six-year study period is P115,000. Annual revenues attributable to the new camera system will be P120,000, whereas additional annual expenses will be P20,000. The corporation's MARR is 20% per year. Show whether this is a desirable investment by using the ERR method.
Dolls are fabricated in a process with two resources. The first resource has a capacity of 1.5 dolls per hour. The capacity of the second resource is 0.99 dolls per hour. The first resource has 7 workers and the second resource has 9 workers. Demand for this process is 1.1 dolls per hour. Wages are $24 per hour. Instruction: Round your answer to two decimal places. What is the cost of direct labor (in $)? per unit
Suppose the local economy experiences an influx of both skilled and unskilled workers, what will happen to prices of goods and services? Group of answer choices Since this increases the supply of labor, prices and wages both decrease. Since this increases the demand for labor, prices and wages both increase. Since this decreases the supply of labor, prices and wages both decrease. Since this increases the marginal product of labor, prices and wages both decrease. A worker on a Texas oil rig is likely to earn _______ than a reception because _________. Group of answer choices less; the job has unattractive characteristics. more; the job is more fun. more; the job is more prestigious. more; the job is more dangerous. please answer two questions
Question 9 1 pts In describing the history of the industrial revolution and child labor, Waylon Hedegaard argued that Employers like child labor because they put up less resistance to beatings as a means of labor control. Orphans were the preferred child labor because employers could not pay them their wages and few had any adult to defend their rights. O Child labor was needed to oil machinery as it was running prior to the invention of good ball bearings O Hedegaard made all these arguments
Consider the following production function: q = 9LK + 6L² – Assuming capital is measured on the vertical axis and labor is measured on the horizontal axis, determine the value of the marginal rate of technical substitution when K= 30 and L= 10. MRTS = -. (Enter a numeric response using a real number rounded to two decimal places.) 20 tv MacBook Air F6 FB 10 F3 23 2$ & з 4 6 7 8 { [ E Y U P D F G J K > C V N M command option - .. .- B