**Practice Sheet: Labor Demand****Question 1:** Find the labor demand function for the cases below assuming a fixed level of capital.| Production Function | MPL (obtained by differentiating the prod function) | The labor demand equation L* | Does L* depend on K? ||---------------------|------------------------------------------------------|------------------------------|---------------------|| $ Y = 10\sqrt{L} \cdot K $ | $ MPL = 5 \frac{\sqrt{K}}{\sqrt{L}} $ | | || $ Y = 2\sqrt{L} + \sqrt{K} $ | $ MPL = \frac{1}{\sqrt{L}} $ | | || $ Y = \ln L + 10K $ | $ MPL = \frac{1}{L} $ | | || $ Y = 5L + \sqrt{K} $ | $ MPL = 5 $ | | || $ Y = 10 \min(L, K) $ | $ MPL = 10\, \text{if } L < K $ \newline $ MPL = 0\, \text{if } L > K $ | | |

Question 1: Find the labor demand function for the cases below assuming a fixed level of capital The labor demand equation Production Function Y = 10VL.K Y = 2√L+√K Y = In L + 10K MPL (obtained by differentiating the prod function) √K 5 TI MPL = 5 MPL √ī MPL= 1 L L* Does L* depend on K?

Question 1: Find the labor demand function for the cases below assuming a fixed level of capital The labor demand equation Production Function Y = 10VL.K Y = 2√L+√K Y = In L + 10K MPL (obtained by differentiating the prod function) √K 5 TI MPL = 5 MPL √ī MPL= 1 L L* Does L* depend on K?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

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