The Labor MarketThe following two graphs show the labor market condition in an industry of a hypotheticalcountry. The firms in this country are perfectly competitive in the output market. The labormarket is also perfectly competitive. Assume that each workday has 8 hours in it and there are20 workdays in a month. Now let's do some number crunching.Demand Side of the MarketThe following graph shows marginal product of labor (MPL) faced by an individual firm. Forexample, it shows that the first worker hired will produce 110 units of the product. The secondworker will produce 100 units. There are 1,000 identical firms in the industry. The market priceof the product produced is $40 per unit.MPL130120110100908070605040302010001234.56791011Labor (Persons)

Step 1: Understanding the Scenario: We're analyzing the labor market for a hypothetical industry in…

Answered: The Labor Market The following two…

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

4. Ariel's T-shirt company hires labor at a rate of $8 per hour and rents capital (sewing machines) at a cost of $128 per machine per day. Throughout this question, you can think of Ariel renting fractions of sewing machines if necessary. Her production function is given by q = 6LK where q measures the number of T-shirts produced each day, L measures the total number of hours worked by all employees in a day and K measures the number of sewing machines. (a) Using the Lagrangian technique, find the cost-minimizing combination of labor and capital for the production of q T-shirts per day. (b) Write down an equation for Ariel's long-run expansion path. (c) Find Ariel's long-run total, average, and marginal cost as a function of the number of T-shirts she produces each day. (d) Sketch Ariel's long-run total expansion path in a diagram. Sketch at least two isoquants with the associated isocost lines. Using your diagram, determine how Ariel's long-run expansion path will shift if the cost of…
In the isoquant/isocost diagram to the right, suppose that the firm is producing 1,000 units of output at point A using 100 units of labor and 200 units of capital. As an outside consultant, what actions would you suggest to management to improve profits? The firm can cut costs by hiring more and less Units of capital (K) 300- 250- A 200- 150- 100- 50- B q = 1,000 0 50 100 150 200 250 300 Units of labor (L) Q ☑
PART 2 Question 1 a. The following table summarizes the short-run production functions for "All Needs Firms". The product of “All Needs Firm" sells for 5 GHC per unit, the cost of input X1 is 8 GHC per unit, and the price of input X2 is 25 GHC per unit. Complete the following table, and then answer the associated questions. Please show how you arrive at your answers. X1 X2 Q MPx1 APr1 AP2 1. 5 10 2 30 3 5 60 4 5 80 5 5 90 6 5 95 5 95 8 5 90 5 80 10 5 60 11 5 30 Answer the following questions using information from the above table. 1. Which input is the fixed input? Which is the variable input? 2. How much is the fixed costs? 3. What is the variable cost of producing 30 units of output? 4. Over what range of variable input usage does increasing marginal returns exist? 5. Over what range of variable input usage does decreasing marginal returns exist? 6. Over what range of variable input usage does negative marginal returns exists? b. You are the manager of a firm that sells output at a…
am. 118.
Use the following information to answer the following questions: Mickey L. Douglas, owner of MLD Incorporated, knows that the marginal product of labor (MPL) for his workers can be defined as follows: MPL = 32 - L The total output a given level of workers can produce is found as: Q=32L-1/2 L² He also knows that the price of his output is $3. His profits can be found as: Profit=(PxQ)-(W x L) What wage would be required to allow Mickey to hire the twenty-fifth worker? O $21 O $7 O $125 O $3 $25
A pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 Pizzas per night 20 36 48 56 60 HINT: In the following, you willI be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. d) Explain how the firm can use this cost function to determine its profit maximising quantity. (Ctrl) e) Determine the firm's profit maximising quantity if the market price is £6, showing how you applied the method that you…
In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the table below. Assume the product price is $4. Calculate the marginal revenue product and the marginal resource cost, and then complete the table. Instructions: Enter your answers as whole numbers. Quantity of Labor Marginal Product Marginal Revenue Hourly Wage Rate ($) Marginal Resource Total Product Total Labor Product ($) Cost ($) (Labor) Cost ($) 10 400 5 50 es 11 420 20 8. 88 12 438 18 11 132 13 454 16 14 182 14 468 14 17 238 15 480 12 20 300 The equilibrium wage rate ($) = The equilibrium level of labor use = workers
Question # 1: Majeda wrote the following answer on her microeconomics examination: “Virtually every production function exhibit diminishing returns to scale because my professor said that all inputs have diminishing marginal productivities. So, when all inputs are doubled, output must be less than double." How would you grade Majeda's answer? Question # 2: Suppose a firm had a production function with linear isoquants, implying that its two inputs were perfect substitutes for each other. What would determine the firm's expansion path in this case? For the opposite case of a fixed-portions production function, what would the firm's expansion path be? Question # 3: Suppose that a firm's production function is q = 30√L. In the short run, where there are fixed costs of $2,200, and labor is the variable input whose cost is $6,300 per units. What is the total cost of producing 20 units of output?
Assume that the above data are for Ali's Surfboards firm which hires workers at $500 a week and its total fixed cost is $1,000 a week.Calculate APL,MPL, AVC, AFC, AC, and MC of each output in the table, ( Values are given for L=1, you are asked to do the rest up to L=7).Labor Output APL MPL AVC AFC AC MC
A10
Con Co. produces a collectible card game. Currently, the price of capital is at $50 and the price of labor is at $10. The marginal product of capital is 200 and the marginal product of labor is 30. To minimize cost of the given output, Con Co. should Use more capital Use more capital and labor Leave capital and labor as is Use more labor
Question 3 Mr. Stonewall has to set up a firm that produces calculators competing with the likes of Casio and Sharp calculators. In order for to estimate the amount of labour and capital needed to maximise profit in the long run, Mr. Stonewall has employed you to help him in this regard. Currently, the competitive wage rate is set at ¢4 per unit of labour and capital is rented at ¢5 per unit. The forces of demand and supply in the industry has also set the equilibrium price of calculators at ¢0.8 per unit. Suppose the production function of Mr. Stonewall's firm is given as Q 20K0.5 LO.5 + 7.5 and the firm total cost of production is ¢1690. Find the optimal levels of capital and labour needed to optimize output. The maximum profit of the firm at the optimal levels of labour and capital. 11.

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS