. In an economy, the total output of all the firms is described by Y = 8 * K^0.25 * L^0.75. For it, The price level is P=20 and the cost of a unit of capital is R=6. There are L=10 workers in the economy. The payments for capital, or the capital bill, amount to RK=752 in the economy. Find the payments for wage, or wage bill, WL, in the economy
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2. In an economy, the total output of all the firms is described by Y = 8 * K^0.25 * L^0.75. For it,
The
The payments for capital, or the capital bill, amount to RK=752 in the economy.
Find the payments for wage, or wage bill, WL, in the economy
To find the wage bill, we must first find total output (Y) and then subtract the capital account (RK) to get total payments to labor (WL).
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- 1) In an economy, the total output of all the firms is described by Y = 8 * K^0.25 * L^0.75. For it, The price level is P=20 and the cost of a unit of capital is R=6. There are L=10 workers in the economy. The payments for capital, or the capital bill, amount to RK=752 in the economy. Find the payments for wage, or wage bill, WL, in the economy. The answer is 2258, I need assistance with how to solve and get that answer116.) Output in Rumantily is produced using capital and labor. There is initially a fixed amount of capital (K0), but the amount of labor may be varied in accordance with labor market conditions. What will happen to real wages and employment in Rumantily if aliens drop off enough capital to effectively double the amount of capital available to workers? Increase, increase Increase, decrease Uncertain, increase Increase, uncertainA firm spends 1.000 pesos regardless of how much output is produced. Every worker hired by the firm receives a wage of 1,200 pesos. We also know that: L TP AP MP TFC TVC TC AFC AVC AC MC 0 0 1 50 2 104 3 162 4 224 5 282 6 336 7 386 8 432 9 474 10 512 11 546 12 576 13 602 14 624 15 640 Where L =…
- A firm spends 1.000 pesos regardless of how much output is produced. Every worker hired by the firm receives a wage of 1,200 pesos. We also know that: L TP AP MP TFC TVC TC AFC AVC AC MC 0 0 1 50 2 104 3 162 4 224 5 282 6 336 7 386 8 432 9 474 10 512 11 546 12 576 13 602 14 624 15 640 Where L =…Q 1. Given the following production function Where; Y is the total output of the economy K is the amount of land, and L is the labor force of the economy Assume A=1 and = 0.5 The initial values of K and L is 100 units. a. How much output does the economy produce? b. What are the wage and rental price of land? c. What share of output does land receive? d. If a flood damaged half of the land, what is the new level of output in the economy? e. What is the new level of wage and rent? f. What share of output does land receiving now? Q 2. Suppose in an economy, people hold currency worth of 10,000 Rs and 4000 Rs worth of demand deposits in the only bank. The reserve-deposit ratio is 20%. a. What is money supply, monetary base and money multiplier? b. Suppose the economy only bank is a simple bank. It takes deposits and make loans and has no capital. Show the balance sheet of the bank. c. The central bank wants to increase the money supply. Should it buy or sell the Govt bonds in the…QUESTION ONEa) When do individual(s) belong to a labour force of a country? Does the size of the labour force say something about the intensity of work in the labour market? Explain.b) Use the knowledge of economics to discuss factors to analyse factors that affect people’s’ decision to work.c) When is the firm operating in the short run and when does it operate in the long run? d) Discuss the factor(s) that determine how many workers the firm wishes to hire in the long run.e) In words, explain the difference between real and nominal wages.f) Suppose a firm purchases labour in a competitive labour market and sells its product in a competitive product market. The firm’s elasticity of demand for labour is 0.4. Suppose further that the wage increases by 5 percent. What will happen to the amount of labour hired by the firm?
- Consider a closed economy. The only two factors of production in this economy are capital and labor. In this economy prices are fully flexible, factor markets are competitive, and the supply of the factors of production is fixed. Suppose there is a change in immigration policy in the country such that there is a huge influx of foreign workers into the labor market, other things being equal. Assume a Cobb-Douglas production function for this economy. a. Graph the effects that this new policy will have on i. The labor market, and the market for capital. ii. The loanable funds market Note: When drawing your graph correctly label all curves, axes, initial and final equilibrium values, and the direction of the change in any curve. b. Explain how the equilibrium values of labor, the real wage, saving, investment, and the real interest rate change.(c) Using a diagram, illustrate how a slack in the labour market impacts aggregate output in the long run, assuming that the aggregate demand curve remains constant.Case C: Galaxy Multinational. Galaxy, a multinational corporation, has two plants, one in the United States and the other in Mexico, and it cannot change the size of the plants or the amount of capital equipment in the short run. The wage in Mexico is equivalent to US $5 per hour. The wage in the U.S. is $25 per hour. Given current employment situation, the productivity per worker in Mexico is 200 units per hour, and the productivity per worker in the U.S. is 400 units per hour. Is Galaxy maximizing output relative to its labor cost? If not, what should Galaxy do? Justify your answer.
- Galaxy, a multinational corporation, has two plants, one in the United States and the other inMexico, and it cannot change the size of the plants or the amount of capital equipment in theshort run. The wage in Mexico is equivalent to US $5 per hour. The wage in the U.S. is $25 perhour. Given current employment situation, the productivity per worker in Mexico is 200 units perhour, and the productivity per worker in the U.S. is 400 units per hour.Is Galaxy maximizing output relative to its labor cost? If not, what should Galaxy doAssume that we have a Cobb-Douglas type aggregate production function in the form: Y=Ka.Lba. Find output per labor; capital per labor (y=Y/ L and k= K/L ). b. Briefly define what is derivative of y with respect to k or y- or dy/dk ? c. Briefly explain why y’>0 or =dy/dk >0 . Is it possible that dy/dk>0 ? Why? d. Briefly explain y’’ < 0 e. Find the elasticity of substitution between K and L. What does expansion path look like?What is the impact on the labour market due to a reduction in income tax rate? Select one: a. labour supply shifts to the left; wage rate increases and level of employment is lower a. labour supply shifts to the left; wage rate increases and level of employment is lower b. labour demand shifts to the right; wage rate increases and level of employment increases b. labour demand shifts to the right; wage rate increases and level of employment increases c. labour supply shifts to the right; wage rate decreases and level of employment is higher c. labour supply shifts to the right; wage rate decreases and level of employment is higher d. labour demand shifts to the left; wage rate decreases and level of employment decreases
