Problem 2 Y MPL 1,8 3 2,4 2,9 3,3 6. 3,6 7 3,8 2.1 Fill the table above computing the MPL for every value of L. Precisely state the definition of MPL and the formula you are using to compute it. 2.2 Suppose the real wage W/P is equal to 0.4. What is the optimal level of labor? Motivate your answer in detail. 2.3 Graph the output as a function of labor units. What is the graphical interpretation of MPL and why? Explain and interpret your answer. 2.4 Do you think decreasing MPL is an assumption that fits the reality in most cases? Motivate your answer by presenting a case in the real world of a firm or a business model characterized by decreasing MPL (if you think it is a valid assumption) or increasing or constant MPL (if you want to present an example for which this assumption is not valid). 2. 4.

Problem 2 Y MPL 1,8 3 2,4 2,9 3,3 6. 3,6 7 3,8 2.1 Fill the table above computing the MPL for every value of L. Precisely state the definition of MPL and the formula you are using to compute it. 2.2 Suppose the real wage W/P is equal to 0.4. What is the optimal level of labor? Motivate your answer in detail. 2.3 Graph the output as a function of labor units. What is the graphical interpretation of MPL and why? Explain and interpret your answer. 2.4 Do you think decreasing MPL is an assumption that fits the reality in most cases? Motivate your answer by presenting a case in the real world of a firm or a business model characterized by decreasing MPL (if you think it is a valid assumption) or increasing or constant MPL (if you want to present an example for which this assumption is not valid). 2. 4.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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