10 12 14 16 | 18 09 18 33 57 72 84 | 93 | 99 102 102 99 04 6 8 20 22 24 A. For each L, solve for AP and MP. Round-up your answers to two decimals. Represent your answers on a table. No need to show the solutions. B. What would be the output elasticities of labor? Round-up your answers to two decimals. If the firm is hiring 16 and 12 workers, interpret the computed ɛ, values. C. Identify the range of number of laborers under increasing marginal returns, diminishing marginal returns, and negative marginal returns. D. Explain why the firm experiences diminishing marginal returns. E. If the firm sells each t-shirt for P75 and each worker receives a wage of P450 per day, what is the optimal number of laborers to hire to maximize profits?

10 12 14 16 | 18 09 18 33 57 72 84 | 93 | 99 102 102 99 04 6 8 20 22 24 A. For each L, solve for AP and MP. Round-up your answers to two decimals. Represent your answers on a table. No need to show the solutions. B. What would be the output elasticities of labor? Round-up your answers to two decimals. If the firm is hiring 16 and 12 workers, interpret the computed ɛ, values. C. Identify the range of number of laborers under increasing marginal returns, diminishing marginal returns, and negative marginal returns. D. Explain why the firm experiences diminishing marginal returns. E. If the firm sells each t-shirt for P75 and each worker receives a wage of P450 per day, what is the optimal number of laborers to hire to maximize profits?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.11P

See similar textbooks

Similar questions

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
1. A new coal-fired power plant will increase aggregate production.Which element of the aggregate production function Y = A × F(K, H) willthis power plant increase?A) AB) FC) KD) H
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…
The cost formula for a company can be modeled by C=1092+40x+0.1x2C=1092+40x+0.1x2 where xx represents the number of items made. A formula for the company's income is modeled with R=108x−0.9x2R=108x-0.9x2, where xx is the number of items sold. A company will break even when its costs equal its income. How many items must a company make and then sell to break even? Answer: (If there are multiple answers, separate the answers with a comma.)
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 answer
Suppose that the production function is Cobb-Douglas. That is, the production function is . Further, assume that the parameter α = 0.3. Suppose that a gift of capital from abroad raises the capital stock by 10 percent. What happens to total output (in percentage change)? The real rental price of capital (in percentage change)? The real wage (in percentage change)? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
P232,P5) Hey! Need help with the following macro question, thank you in advance! (chart attatched below) Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $1.50. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Find the marginal product (in brackets), and the value of the marginal product (in dollars), of each hour of labor. If the wage paid to workers in Die Cast’s plant is $25 per hour, how many hours of labor should the firm employ? How many hours will be employed if the wage increases to $35 per hour? Explain. How many hours will be employed if the wage is $35 per hour, but the price of a bracket declines to $1?
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.
Suppose the production function is Y = AK0.3N0.7. Suppose in 2010, K = 1000, N = 100, and Y = 199.5. In 2020, capital, labor, and output have doubled, so K = 2000, N = 200, and Y = 399. (a.) By what percentage did productivity grow from 2010 to 2020? (b.) If output had risen to 798 instead of 399, and capital and labor doubled, by what percentage would productivity have grown from 2010 to 2020?
A firm produces using a production function given by F(K, L)=ln(K42+40L). The firm employs 100 workers. The nominal wage rate is 10 and the price of its good is 2. The firm can increase its profit by a) Hiring more workers b) Firing some of its workers c) It is already at the maximum profit d) We need to know the amount of capital to know how many workers it should hire
Explain the following identity: C + G + I + NX ≡ Y ≡ YD + (TA − TR) ≡ C + S + (TA − TR)
In ‘standing on shoulder’ effect in the production of ideas existing technology can be productive in the production of new technology just as it is in the production of final goods. True or False