Pizzas are produced using capital as a specific factor and labor as a mobile factor. The graph below shows the marginal product of labor curve: MPL, Real wage 50 MPL L 120 200 Suppose the real wage is 20. Calculate: capital owners' total real rent, workers' total real wage bill, and total output in the pizza industry. 20
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- Calculate the Marginal Product of Labor Y=ALαK1-α A= 1.5 α= 0.5 L=Labor K= Capital Factor Markets: Labor Supply (L^S)= 100 Labor Demand (L^D)= 200-5(W/P) Supply of Capital (K^S) = 100 Demand for Capital (K^D)= 200-4(R/P) (W/P)= real wage rate (R/P)= real rental rateQuestion In the short run, a firm operates a factory which it leases for $2000 per annum. To increase output, the firm employs increasing amounts of labour at a wage rate of $500 per worker. The table below shows the relationship between the amount of labour employed and the amount of output produced in the factory. Labour Output (TPPP) APP MMP VC FC TC ATC MC 0 0 ____ ___ 0 _ _ 1 15 2 50 3 80 4 100 5 110 6 115 1. Plot the APP and MPP curves on the same graph 2. Plot the ATC and MC curves on the same graphExplain the rule that proft-maximizing frms follow when they decide howmuch capital and labor to hire.
- Suppose a firm’s hourly marginal product of labor is given by MPN = A (200 – N) If A = 0.2 and the real wage rate is $10 per hour, how much labor will the firm want to hire? Suppose the real wage rate rises to $20 per hour. How much labor will the firm want to hire? With the real wage rate at $10 per hour, how much labor will the firm want to hire if A rises to 0.5?Give typing answer with explanation and conclusion Production function Y=8*K^.33*L^.66 Now what if there is skill biased technological change that makes capital more productive relative to labor such that alpha or the exponent on K rises to .5 and the exponent on L falls to .5 By what % does real wage change? By what % does R/P change?Use the information given here to answer the following question. Sales revenue = Pm * Qm = 150 Payments to labor = w * Lm = 100 Payments to capital = Rk * K = 50 Agriculture: Sales revenue = Pa * Qa = 150 Payments to labor = w * La = 50 Payments to land = Rt * T = 100 Holding the price of manufacturing constant, suppose the increase in the price of agriculture is %10 and the increase in the wage is %5. Explain what has happened to the real rental on land and the real rental on capital ? 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.
- WHAT DO YOU MEAN BY THE INDIVISIBILTY OF THE FIXED FACTOR IN ECONOMICS EXPLAIN IT thankuUnits of labor Opportunity cost of a worker in terms of units output = real wage required by an additional worker Real value of Output per additional worker Maximum real wage a producer is willing to pay for an additional worker (1) (2) (3) 8 1 9 10 2 8 12 3 7 16 4 6 18 5 5 20 6 4 22 7 3 a) Carefully draw for yourself the demand and supply curves of labor on a diagram and find the equilibrium real wage and the equilibrium level of employment. To each level of employment corresponds a level of real GDP given in the following table. Production Function Schedule Level of Employment Aggregate quantity supplied = real GDP 10 10 12 40 14 65 16 85 18 100 20 105 b) Find the full employment real GDP, aggregate quantity supplied, and nominal wage for each of the following price levels P = 1, 2 ,3, 4. Does the equilibrium levels of employment and AQS change as the price level…A firm spends 1.000 pesos regardless of how much output is produced. Evry 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 =…
- Is it rational for a firm to hire the 3rd worker? Why and Why not? Is it rational for a firm to hire the 4th worker ? Why and why not? Graph the TP, MP and AP Schedule.Production function for firm is Ys=ln(Ld)Utility function is U(Yd, Ld)= Ys+ln(1-Ls)1) Write down maximization problem of firm and find labor demand curve2) Write down maximization problem of household and find labor supply curve3) Write down market clearing conditions4) Calculate equilibrium employment and real wage5) If the price is equal to $2, what would be the nominal wage in equilibriumA 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 =…
