Suppose the hourly wage is $25, the price of each unit of capital i $50, and the price of output is $100 per unit. Assume that the firm cannot a ny of these prices. The production function of the firm is Q(E, K) = √E × a. If the current capital stock is fixed at 100 units, what is the Marginal Product of Labor?
Suppose the hourly wage is $25, the price of each unit of capital i $50, and the price of output is $100 per unit. Assume that the firm cannot a ny of these prices. The production function of the firm is Q(E, K) = √E × a. If the current capital stock is fixed at 100 units, what is the Marginal Product of Labor?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Please don't switch the subject to Advanced Math. For some reason whenever the subject is switched to those two. I don't receive any help it is a bug. please help me thank you.
Transcribed Image Text:2.
Suppose the hourly wage is $25, the price of each unit of capital is
$50, and the price of output is $100 per unit. Assume that the firm cannot affect
any of these prices. The production function of the firm is Q(E, K) = VE × K.
If the current capital stock is fixed at 100 units, what is the Marginal
Product of Labor?
а.
b. How many hours of labor should the firm hire in the short run?
c. Set
the profit function. How much profit will the firm earn if the rental
dn
costs of capital are $20
per
unit?
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