Pizzas are produced using capital as a specific factor and labor as a mobile factor. The graph below shows the marginal product of labor curve: MPL, Real wage 50 MPL 20

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Pizzas are produced using capital as a specific factor and labor as a mobile factor. The graph below shows the marginal product of labor curve:
MPL, Real wage
50
MPL
L
120
200
Suppose the real wage is 20. Calculate: capital owners' total real rent, workers' total real wage bill, and total output in the pizza industry.
20
Transcribed Image Text:Pizzas are produced using capital as a specific factor and labor as a mobile factor. The graph below shows the marginal product of labor curve: MPL, Real wage 50 MPL L 120 200 Suppose the real wage is 20. Calculate: capital owners' total real rent, workers' total real wage bill, and total output in the pizza industry. 20
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