Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134643175
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 14, Problem 11RQ
To determine
Increase in wage rate and its effect.
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If the demand for soccer tickets increases, why would an economist expect the salaries of soccer players to increase?
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n he fong run, assume a firm uses both labor and capital to produce 25 units of output. The marginal
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price (P) is $6, what isthe value of the marginal product of labor (VMPL)?
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Chapter 14 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
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- A5Charlie's Umbrellas has a production function given by Q = L^0.5K^0.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Charlie want to buy for each unit of labor?arrow_forwardThere are two factors of production, X and Y. They are being used to produce a fixed amount of output called A. If the amount of output, A is held constant, and the isoquants are convex, would the price of X going down always mean less of Y is used? Explain why or why not by explaining through the use of a graph.arrow_forwardX and Y are factors of production. They are used to make a fixed output, Z, of the product. The isoquants are convex. If Z, the output produced is held constant, will a decrease in X's price always cause the quantity of Y being used to decrease? Explain and show in a graph.arrow_forward
- Suppose you are considering hiring another worker. Also assume that you are at a firm that is operating at a point where the marginal product of labor is 5 and the price of each unit of labor is $2, and the marginal product of capital is 20 and the price of each unit of capital is $10. Should you hire another worker? If you hire another worker, what will happen to the marginal product of labor and why?arrow_forwardWhat effect will a reduction in commodity price have on the input demand curve of the firmarrow_forwardIn our paper airplane company, some inputs were fixed and some were variable. Match the input to whether it was VARIABLE or FIXED. Paper- Stapler- Staples- Employees- Production space-arrow_forward
- teach thisarrow_forwardA firm's production function is: q = 20L1/2K1/2 where q is the firm's total product, L is the quantity of labor employed, and K is the quantity of capital employed. The price of labor is $25 per unit and the price of capital is $100 per unit. a. What is the equation for the marginal product of labor? b. What is the equation for the marginal product of capital? c. Given the price of labor is $25 per unit and the price of capital is $100 per unit, what is the cost-minimizing combination of capital and labor that can produce 800 units of output?arrow_forwardA firm produces output with capital and labor. Suppose currently the marginal product of labor is 28 and the marginal product of capital is 5. Each unit of labor costs $11 and each unit of capital costs $3. Is the firm minimizing the cost of production? Explain. be the marginal product of labor, r be the price of capital, w be the cost of labor, and MRTS be the marginal rate of technical substitution. Let MPK be the marginal product of capital, MPL The firm is MP МP K A. not minimizing the cost of production because r w MPK MPL B. not minimizing the cost of production because MRTS > MPK MPL C. minimizing the cost of production because r MPK D. minimizing the cost of production because MRTS = MPL MP MPL K r O E. minimizing the cost of production because If not, how could the firm decrease the cost of production holding output constant? and less The firm could decrease the cost of production holding output constant by using morearrow_forward
- Does additional input of labor entail a steady increase in the output of a firm? Why or Why not?arrow_forwardThe production function is Q = 18K + 9L. Rent is $80 and wage is $40. Draw a graph of the isocost and isoquant curves.arrow_forwardA firm uses capital and labour to produce widgets . In the short run capital is fixed ,while labour is variable . The short-run production is X = -L^3 +24l^2 +240L where X is the number of widgets produced in per week,and L is the number of workers employed .Each worker works a 40-hourweek. The wage rate is $12 per hour. a. Calculate the ranges of variables for L over which the firm is in stage 1,2 and 3 b. What is the minimum product price at which the firm will operate in the short run? c. The product price, over which the firm has no control is such that the firm's maximum posible pure profit $ 1096 per week. In order to achieve that level of profit it must employ 16 workers .How much is the firm's total cost?.arrow_forward
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