1. Widget factory Inc. in Wisconsin has the following production function: F(L,K) = 2L1/2 K1/2 L represent the number of labour hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at $25/hour. Since this is a competitive market, the factory output the factory gets per is output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many factory workers would Widget Factory Inc employ? What is their profit rate?

1. Widget factory Inc. in Wisconsin has the following production function: F(L,K) = 2L1/2 K1/2 L represent the number of labour hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at $25/hour. Since this is a competitive market, the factory output the factory gets per is output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many factory workers would Widget Factory Inc employ? What is their profit rate?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 16CQ

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Widget factory Inc. in Wisconsin has the following production function: F(L,K) = 2L1/2 K1/2 L represent the number of labour hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at $25/hour. Since this is a competitive market, the factory output the factory gets per is output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many factory workers would Widget Factory Inc employ? What is their profit rate?
Suppose LA.Banana employs workers to harvest bananas. Answer the following questions using the information provided below: Quantity of labour: 0 labour 1 labour 2 labour 3 labour 4 labour 5 labour 6 labour Units of Output: 0 banana 16 banana 21 banana 25 banana 31 banana 36 banana 40 banana a.) Calculate the marginal product of labor, the value of the marginal product of labor, and the marginal profit ,suppose a fully competitive company, LA"Banana, where wages are fixed at $800 and each banana (output) sells for $20.
True or False, Explain Why 1. A production function is characterized by ? = 10 + 5L, where q is output per hour and L is labor input per hour. If workers earn $10 per hour, the marginal cost of the 5th unit of output is $10. 2. The producers’ surplus in the short-run reflects what the firms gain, while the producers ‘surplus in the log-run reflects what the input owners gain. 3. A monopoly is a price maker, thus its price can never be equal to its marginal revenue. 4. For a monopolistic competitive firm, if a government imposes a lump-sum tax on a firm, the policy will never affect its profit maximizing output and price.
Consider a firm that is perfectly competitive in the market for inputs and outputs. The firm hires two types of workers: low-skill (high school graduates and high school dropouts) and high-skill (undergraduate and postgraduate degree) workers. The firm compensates high-skilled workers at the rate w H and low-skill workers at the rate w L . It produces the output subject to a Cobb-Douglas production technology F(L,H) = (AH) α (L) β , where H - is the amount of high-skill hours, L - the amount of low-skill hours, and A - the technology parameter that augments the productivity of the high-skill labour. 1. Find the range of values of α and β that ensure that the production technology has (a) diminishing marginal product of high-skill labour (b) diminishing marginal product of low-skill labour (c) complementarity between high-skill and low-skill labour 2. What is the example of a firm with production technology described in 1. ? For the remained of the question consider β = 0.5 and α = 0.1:…
Suppose the productivity of capital and labor are as shown in the accompanying table. The output of these resources sells in a purely competitive market for $1 per unit. Both capital and labor are hired under purely competitive conditions at $3 and $1, respectively. a. What is the least-cost combination of labor and capital the firm should employ in producing 80 units of output? Explain. b. What is the profit-maximizing combination of labor and capital the firm should use? Explain. What is the resulting level of output? What is the economic profit? Is this the least costly way of producing the profit maximizing output?
Suppose that the market for apples is perfectly competitive. Production of apples requires two inputs:workers (L) and land (K). The production function for apples is:F(K,L)=3K^(1/3)* L^(2/3) A) Suppose that W=4, R=16, and in the short-run, K=27. Find the firm’s short-run cost function SRC(q)and short-run marginal cost function SRMC(q).B) What is the optimal production of apples if P=4? What are consumer surplus and profit?C) Find the firm’s short-run supply of apples Q(P) when W=4, R=16 and K=27.D) Find the firm’s long-run cost function LRC(q) and long-run marginal cost function LRMC(q) when W=4and R=16. How do these compare to the firm’s short-run cost function and marginal cost function?E) Find the firm’s long-run supply of apples q(P) when W=4 and R=16.
Suppose that the price of labor (the wage rate) is $100 a day and that the rental price of capital is $50 a day. Currently the Jedie Weapons Corporation is using ten units of capital and five units of labor to produce 500 lightsabers a day. Each lightsaber sells for $2. At the current input use levels, the marginal product of capital is 40 lightsabers per day and the marginal product of labor is 60 lightsabers a day. Is the firm making an economic profit at its current levels of operation? 2. Could the firm increase its profits at the current level of output by adjusting its use of labor and capital? If so, how should input use be adjusted?
Imagine that the price of input 1 is $16 per unit, the price of input 2 is $25 per unit, and the firm has fixed costs of $60. The firm is in a competitive market where the market price is $240 per unit of output. How much should the firm produce? How much profit does the firm make?
Suppose that you are one of rubber producers (sellers) in the perfectly competitive market in Thailand. Make it simple: suppose there are two types of used inputs consisting of land and workers. Assume that, in short-run production, you operate on a fixed size of a land and the cost of renting the land is 2 Baht per day. The table (A) below shows the relationship between the quantity of rubber produced by your company per day and costs of workers per day. The goal of your firm is to maximize (minimize) profits (losses).Table (A) The Quantity of rubber (units) produced per day Costs of workers per day in baht ATC AVC MC 0 0 1 5 2 9 3 12 4 14 5 15 6 18 7 22 8 27 9 33 10 40 Answer the following questions 1. Filling in Table (A) above for ATC, AVC and MC from 0 to 10 units. 2. Using economics analysis, suppose the market price of the rubber in Thailand is 3.5 Baht per unit, how…
Q1) Complete the following table and what production technique should this firm use: Assuming the price of capital (k) is $5 and the price of labor (L) is $10, and the price of commodity (O) is $3. Technique TC Profit(7t) A 50 10 6 B 50 9 8 C 50 5 10 D 50 12 8 E 50 2 10 F 50 7 12
A firm is currently employing a cost-minimizing combination of labor and capital for a given level of output. The firm is employing 20 workers, and the marginal product of the last worker is 40 units of output. The firm is employing 100 units of capital, and the marginal product of the last unit of capital is 10 units of output. If the wage rate is $20 per hour, what is the price of capital? (A) $2.5 per hour (B) $5 per hour (C) $10 per hour (D) $100 per hour (E) $200 per hour
Answer the question based on the following information: Suppose 20 units of product A can be produced by employing just labor and capital in the four ways shown below. Assume the prices of labor and capital are $2 and $3, respectively. Production Techniques I II III IV Labor 4 3 2 5 Capital 2 3 5 1 If the price of product A is $1.50, and the firm is producing efficiently the firm will realize Multiple Choice Economic profit of $30. Economic loss of $17. Economic profit of $20. Economic profit of $17. Economic profit of $43. Note:- Give me proper calculation and correct answer otherwise i give downvote Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.