This is a more difficult question relating to the AS curve. Read the textbook chapter and chapter summary carefully. Identify the correct statement: Olf there is diminishing marginal product of labor, a profit maximizing firm will wish to supply a smaller quantity of output when the price of the produced good is lower. Olf there is diminishing marginal product of labor, the aggregate supply curve will slope downward. Olf there is diminishing marginal product of labor, a profit maximizing firm will wish to supply a larger quantity of output when the price of the produced good is higher. O When the representative consumer exhibits diminishing marginal utility in the consumption of produced goods, the aggregate demand curve will slope upward.

This is a more difficult question relating to the AS curve. Read the textbook chapter and chapter summary carefully. Identify the correct statement: Olf there is diminishing marginal product of labor, a profit maximizing firm will wish to supply a smaller quantity of output when the price of the produced good is lower. Olf there is diminishing marginal product of labor, the aggregate supply curve will slope downward. Olf there is diminishing marginal product of labor, a profit maximizing firm will wish to supply a larger quantity of output when the price of the produced good is higher. O When the representative consumer exhibits diminishing marginal utility in the consumption of produced goods, the aggregate demand curve will slope upward.

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

Please dont provide answer in handwritten solution...
Consider an economy with production function given by Y = AK0:5L0:5 where A is the total factorproductivity (TFP), K is the capital stock and L is the labor input. For simplicity assume capital is xed and equal to 1. Assume A=100.a. Write the rm's problem of choosing labor demand. Derive the demand for labor as a functionof the real wage.b. Assume labor supply is inelastic and xed at L= 100. Find the equilibrium values of the wageand the employment level for this economy. Display graphically the labor supply and the labordemand curves. Carefully label your graph.c. Suppose the economy faces a positive productivity shock and TFP is now A=200. Displaygraphically the new labor demand function. What are the equilibrium values of employment andthe real wage?d. Compute the total output when A=100 and when A=200. What is the output's growth rate?Compare that growth rate with the growth rate in A. How does the growth rate of output percapita compares to the growth rate in A? Explain…
= $30 and wage rate Let the production function be given by: q = 10(L^2)K, with rental rate v W = $20. 1. How much K and L are employed to produce 11,250 units of output? 2. Suppose that the firm wants to increase output to 19, 440 units of output, now how much K and Lare employed to produce with minimize cost? 3. Suppose that in the short run the amount of capital is fixed at K = 10, what is the firm short run fixed cost? 4. Suppose that in the short run the amount of capital is fixed at K = 10, what is the short run total cost of producing 900 units of output?
Given the production function, Y = AK "L(¹-a) assume that a = 1/3. The labor supply equation is LS = 60*w - R In TABLE ONE, each column represents a labor market in medium-run equilibrium. In column two, an increase in on-the-job-search (OJS) has shifted labor supply to the right. In column three, workers' awareness of higher productivity has shifted labor supply back to the left. 1. Complete TABLE ONE. [Round w to two decimal places.] W = 2/3Y L TABLE ONE Y A K L W R (u) 1 (a) (b) 6000 398 8.23 (c) 21 2 5444 (d) 6000 (e) 8.54 70 (u) = Bw-L-R 3 5.3 6000 415 (h) 75 (1)
please help
the production fuction shows the volume of output that can produced from given inputs true false
onsider a producer with budget C = 200 who can buy labor L at a wage w = 10 and capital K at a price r = 5. The producer has the following production function F(K,L) = 3K1/3 L2/3 . a. Does F(K,L) exhibit increasing, decreasing, or constant returns to scale? Show your work. Consider a new production function F(K,L) = K1/3 L2/3 , where is a? ? positive constant not equal to 3. Does the new production function exhibit increasing, decreasing, or constant returns to scale? b. Using F(K,L) = 3K1/3 L2/3, find the optimal bundle. Show your optimal bundle on a plot (this should include isoquant and isocost curves). c. Suppose the budget is reduced to C = 100 and then C = 50. Find the new optimal bundles. Plot these bundles, along with the initial optimal bundle, on one plot. Draw the expansion path PLEASE SHOW GRAPHS do not use chat gpt
) Suppose there are two inputs in the production function-labor and capitaland that these two inputs are perfect substitutes. Suppose that the price of capital is 750 GHC per machine per week and that the weekly salary of each . worker is 300 GHC . i) Draw the isocost line ii) With the aid of a graph, explain the effect of a wage decrease on flrm-level employment and output holding initial cost ouday constant.
sitier the production model studied in Chapter 4. Final output in the economy is pro- duced using capital K and labor L. The production function is: Y = ĀK'/³L^/5 Assume that the supply of all inputs are exogenous and equal to L and K. Perfectly compet- itive firms are price-takers and choose how much capital and labor to demand by maximizing profits. Let w and r denote the wage and rental rate of one unit of labor and capital respec- tively. (a) What are the 5 endogenous variables in this model? Also list the exogenous variables and the parameters and provide a brief explanation of each. (b) Show the first order conditions for labor and capital. Explain the intuition for why these conditions are optimal for a firm. Are there diminishing returns to these inputs in this model? ( (c) Show that the solution for output per capita can be written as y = Ak/5. Observed GDP per capita is 3 in this economy. Capital per person is 32. If Ā = 1, what does this model predict for GDP per person?…
Consider an economy where the aggregate production function is given by F(K, L) = 4VKL. All markets are competitive. Suppose the supply of capital and labor are given by K = 4 and L = 7.Compute the equilibrium real wage. Please round your answer to two decimal places. Type your answer.
Question You are the manager of a firm and you are required to optimize the Cobb Douglas function given the following parameters. The maximum amount of money available is$1600 where the price of K = 12 and the price of L=6. That is PK=12 and PL=6. The function is given as q=K0.4+L0.6. What is the constraint equation? a. none of the above b. 12K - 6L = 1600 c. 12K/6L = 1600 d. 12K+6L=1600
Given that the inputs are not perfect substitutes nor perfect compliments. A firm employs x amount of workers and has x amount of machines. How the firm would react if wages increase in the short and long term given that the firm wants to keep its output constant? New machines can be ordered within 6 months.