1. The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: < Q = 100L-L2 MPL = 100 - 2L,< where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor. (a) What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand?< (b) Ectenia has 200 workers who supply their labor inelastically. Solve for the wage W. How many workers does each orchard hire? How much profit does each orchard owner make?< (c) Calculate what happens to the income of workers and orchard owners if the world price doubles to $4 per apple.< (d) Now suppose the price is back at $2 per apple, but a hurricane destroys half the orchards. Calculate how the hurricane affects the income of each worker and of each remaining orchard owner. What
1. The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: < Q = 100L-L2 MPL = 100 - 2L,< where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor. (a) What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand?< (b) Ectenia has 200 workers who supply their labor inelastically. Solve for the wage W. How many workers does each orchard hire? How much profit does each orchard owner make?< (c) Calculate what happens to the income of workers and orchard owners if the world price doubles to $4 per apple.< (d) Now suppose the price is back at $2 per apple, but a hurricane destroys half the orchards. Calculate how the hurricane affects the income of each worker and of each remaining orchard owner. What
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 5SCQ: If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275...
Related questions
Question
Solve it all on paper!
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc