Suppose that a certain factory output is given by the Cobb-Douglas production function Q(K, L) = 60K¹/312/3 units, where K is the level of capital and L the size of the labor force need to maximize the factory's output.
Q: Maintenance money for a new building has been sought Mr. Kendall would like to make a donation to…
A: Future Worth: Future worth is a financial concept that refers to the present value of a future sum…
Q: The chamber of commerce has virtually no budget for tourism promotion. State law authorizes an added…
A: A tax on accommodation establishments like hotels, motels, and bed and breakfasts is known as a…
Q: ACME Industries produces steel near a river that nearby residents liked to swim. A by-product of…
A: An economic notion known as "externality" describes how an economic activity affects parties that…
Q: 1. Optimal Use of a Single Input. Julian Smyth manages production at Taffy Apple Inc., a company…
A: Marginal product (MP) refers to the additional output that is generated by adding one more unit of…
Q: The recent supply chain bottlenecks explain part of the recent spike in inflation rates across the…
A: Supply chain bottlenecks refer to the disruption in the flow of goods and services within a supply…
Q: CME Industries produces steel near a river that nearby residents liked to swim. A by-product of…
A: Dead weight loss: It is defined as the loss of total welfare (or the total surplus = consumer…
Q: Consider the following price indexes: 90 in 2015, 100 in 2016, 110 in 2017, 121 in 2018, and 150 in…
A: CPI (Consumer Price Index) refers to a price index that determines the overall change in consumer…
Q: The market for organic and locally sourced foods has skyrocketed over the past decade as consumers…
A: If demand is elastic, a small change in price will result in a relatively large change in quantity…
Q: Problem 2. Consider the partnership-game we discussed in Lecture 3 (pages 81-87 of the textbook).…
A: SPNE stands for Subgame Perfect Nash Equilibrium. It is a concept in game theory that extends the…
Q: . With trade, how many units will be . Without trade, consumer surplus ar . Without trade, total…
A: A nation will import from the rest of the world if domestic demand is greater than domestic supply…
Q: There is a proposal to make childcare fees deductible from income taxes. Briefly explain whether…
A: Income tax is a tax that a government imposes on the income received by people and enterprises under…
Q: Quantity Private Value Private Cost External Cost (Units) (Dollars) (Dollars) 1 2 3 4 5 6 7 Table…
A: External cost are the cost borne by the third party. A Market equilibrium is where the Private value…
Q: Given the following information, what would be the value of M1? Small time deposits $650…
A: Money supply is used to calculate the flow of money in the economy. The money is the medium of…
Q: Using the graph, illustrate the long-run impact of the sharp increase in saving by shifting both the…
A: The AD-AS model combines and brings together the aggregate demand and supply curves to better…
Q: Suppose that the government decides to give a subsidy s to a firm that hires a new worker, which…
A: The Diamond-Mortensen-Pissarides (DMP) model is a widely used macroeconomic model of labor market…
Q: Suppose that Far North Canadian Lumber, Ltd., sells lumber in Canada at a price of $1,000 per 1,000…
A: Dumping means exporting a product to a foreign country at a price that is lower than the price…
Q: Figure 3-19 Price Refer to Figure 3-19. The total gains from trade, representing both producer and…
A: Equilibrium is where the demand curve intersects the Supply curve. Consumer surplus is the area…
Q: in this economy, private saving= ate public saving investment the trade balance and the equilibrium…
A: Here, Y = C + I + G + NX Where Y is output, C is consumption, I is an investment, G is government…
Q: The following graph shows the aggregate demand curve (AD), the short-run aggregate supply curve…
A: The aggregate demand (AD) curve depicts the inverse relationship between the price level and…
Q: A company produces very unusual CD's for which the variable cost is $ 9 per CD and the fixed costs…
A: Total cost is a sum fixed cost and variable cost. Total revenue is the product of price and output
Q: The following graph represents the money market for some hypothetical economy. This economy is…
A: Central banks are in charge of a number of critical duties. The first and most visible role is money…
Q: In general, which of the following statements about the supply of capital is incorrect? O a. An…
A: The supply of capital refers to the amount which households saves out of their income. This saving…
Q: For problems 1, 2, 3, we consider an agent Ann who consumes goods and y and has a utility U (x,y) =…
A: The utility is maximized where the slope of indifference curve tangents the slope of the isocost…
Q: Suppose that a consumer's utility function is given by u(x, y) = x(a + y), where x is consumption…
A: The reservation price of y requires that, at this price the consumer is indifferent between buying y…
Q: 2. On the diagram below draw in a Supply Curse for Labor (nurses) and the Demand Curve for Nurses.…
A: The labor market is a very important concept within the spheres of both micro and macroeconomics as…
Q: The following table indicates the unit prices (in Rands) and quantities of three goods purchased…
A: Index numbers are quantitative indicators that show how price and quantity vary over time. Economic…
Q: 1. A trout ranch is now for sale for $40,000. Annual property taxes, maintenance, supplies, and so…
A: PW method or present worth method is the value of cash inflows during the life of project discounted…
Q: Why is the demand curve facing an individual firm in a perfectly competitive market horizontal? Does…
A: A market with perfect knowledge, many buyers, and a large number of tiny enterprises offering a…
Q: A monopoly producer of music videos sells them to TV stations and to individual consumers. Because…
A: Price discrimination is a pricing strategy employed by a monopolist to charge different prices to…
Q: Suppose the government provides a recruiting service program that can reduce the cost of recruiting.…
A: A Search and Unemployment Model with Two Sides. It involves both the supply (workers) and demand…
Q: Determine the value of the given gradient factor. (A/G, 1.015%, 11) Final answer round to the…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Consider that around 21% of children in America today grow up in poverty. Does this pose any…
A: According to the idea of American (country U's) exceptionalism, the country differs fundamentally…
Q: From the following cost function find the Average Cost, Variable Cost and Marginal Cost Function.…
A: Total cost is the cost of producing all the units of good. Average cost is the cost of production…
Q: 1. Determine the profit-maximizing quantity, the profit-maximizing price and the profit of the firm…
A: Total revenue is the product of price and quantity. Total profit is the difference between the…
Q: In 2013, you spent $55,000 for new equipment plus $5,000 to install it, which is added to the cost…
A: Initial cost=Equipment cost +installation cost Equipment cost=$55000 Installation cost=$5000 Initial…
Q: Worldwide quarterly sales of a brand of cell phones were approximately q = −p + 156 million phones…
A: This question is rely on the idea of equilibrium price. Knowing the situation of equilibrium price…
Q: an economy with a production function, Consider Y = K (AN), saving rate s, depreciation rate 8,…
A: Y = K1/3(AN)2/3 --------------> production function. Where Y is output; K is capital; and AN is…
Q: Imagine a small town in which only two residents, Rochelle and Alec, own wells that produce safe…
A: Marginal social cost (MSC) refers to total cost to society as a whole for the production of an…
Q: If absolute value of price elasticity of demand is 1/2, this is an example of elastic demand. • True…
A: The elasticity of demand is calculated as th percentage change in quantity divided by the percentage…
Q: Scruffie the cat has $15 to spend each month on cat toys, which cost $3 each, and cat treats, which…
A: The linear representation of a budget constraint is known as a budget line. The budget constraint…
Q: Which of the following production technology exhibits constant returns to scale? I. f(K, L) = K0.25…
A: The constant return to scale states that increasing capital (K) and labor (L) by X% will increase…
Q: You have already saved $55. You earn $9 per hour at your job. You are saving for a bicycle that…
A: Given: Cost of bicycle = $199 Total saved money = $55 Remaining money required to buy the bicycle…
Q: 4. A monopolist is faced with the following cost and revenue curves: $ 80 70 60 50 40 30 20 10 0 -10…
A: Disclaimer- “Since you have asked multiple question, we will solve the first three question for you…
Q: Governments often require people to obtain insurance; for example, all drivers are required to carry…
A: An insurance requirement statement is the piece of a business policy wherein the types and minimum…
Q: 1. Fill in the missing values in the table which represents the costs of a firm: Quantity TC FC VC…
A: Note : As you have posted multiple questions. But as per the policy we are allowed to answer the…
Q: True/False International trade leads to a increase in the competition in the market.
A: The trading of products and services across international borders is referred to as international…
Q: Below table contains a data sample where X is the independent, and Y the dependent variable. Using…
A: A linear regression equation explains the linear relationship between the dependent variable (Y) and…
Q: What is the equilibrium payoff of player 1? PLAYER 1 Up Down PLAYER 2 Left 35, 35 18, 28 Right 58,41…
A: Dominant strategy is the strategy that yields higher payoff and the strategy does not change with…
Q: Solve the following question with complete solution and include cash flow diagram in handwritten…
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: Consider a model of revolutions. Society is made up of N > 1 people. Simultaneously, each person…
A: The concept of expected utility in decision theory describes the degree of happiness or contentment…
Given the solution for a to c. Show clear working for questions d to f
Trending now
This is a popular solution!
Step by step
Solved in 6 steps
- What is the difference between a fixed input and a variable input?What shapes would you generally expect a total product curve and a marginal product curve to have?please asnwer the question in the image Some economists believe that the U.S. economy as awhole can be modeled with the following productionfunction, called the Cobb–Douglas production function:Y 5 AK1/3L2/3,where Y is the amount of output, K is the amount ofcapital, L is the amount of labor, and A is a parameterthat measures the state of technology. For this productionfunction, the marginal product of labor isMPL 5 (2/3) A(K/L)1/3.Suppose that the price of output P is 2, A is 3, K is1,000,000, and L is 1,000. The labor market is competitive,so labor is paid the value of its marginal product.a. Calculate the amount of output produced Y and thedollar value of output PY.b. Calculate the wage W and the real wage W/P. (Note:The wage is labor compensation measured in dollars,whereas the real wage is labor compensationmeasured in units of output.)c. Calculate the labor share (the fraction of the value ofoutput that is paid to labor), which is (WL)/(PY).d. Calculate what happens to output Y,…
- 37. Which of the following is the interpretation of production function Y = F (K, L)? a.Output depend on K and L b.If K Increases, L also needs to increase c.If K increases, L needs to decrease d.If K and L Increases Y increases as wellAssume that we have a Cobb-Douglas type aggregate production function in the form: Y=Ka.Lba. Find output per labor; capital per labor (y=Y/ L and k= K/L ). b. Briefly define what is derivative of y with respect to k or y- or dy/dk ? c. Briefly explain why y’>0 or =dy/dk >0 . Is it possible that dy/dk>0 ? Why? d. Briefly explain y’’ < 0 e. Find the elasticity of substitution between K and L. What does expansion path look like?USE R LANGUAGE TO SOLVE THE equation The output of a production process, Q is given by the function2K^(-3)L^(5/2)/2K log4 6L^2where K and L denote capital and Inbour. Calculate the output when the capital and labour are 10 and 20 units, respectively.
- Production Function. Consider the Cobb-Douglas production function discussed in class:F(K, L) = AK^1/3 L^2/3. Suppose that parameters are initially A = 1, K = 150, and L = 10. d) Suppose that the quantity of labor L doubles. Calculate Y, w, r, Y/L, and K/L. Com-ment on how and why these numbers changed relative to (c) and why they did so. E) Suppose that the quantity of capital K doubles as well. (So now both K and L aretwice their previous value). Calculate Y, w, r, Y/L, and K/L. Comment on how thesenumbers changed relative to both their initial values, and their values in (d).Suppose the production function for widgets is given byq = kl - 0.8k2 - 0.2l2where q represents the annual quantity of widgets produced, k represents annual capital input, and l represents annual labor input.a. Suppose k = 10; graph the total and average productivity of labor curves. At what level of labor input does this average productivity reach a maximum? How many widgets are produced at that point?b. Again assuming that k = 10, graph the MPl curve. At what level of labor input does MPl = 0?c. Suppose capital inputs were increased to k = 20. How would your answers to parts (a) and (b) change?d. Does the widget production function exhibit constant, increasing, or decreasing returns to scale?In 2000, the country of Cobra Island has an initial level of capital set at 10 units. The population of Cobra Island is unknown, but we do know that it grows each year at some constant rate. The level of total income is 500 cobra dollars. Finally, the total production function of Cobra Island can be described as Y=10*L1/2k1/2 a)What is the initial population of Cobra Island? b)Let the wage of labor is 0.4, and the rental rate of capital is 0.6. The capital to labor ratio after two years (in 2002) is 50 while the amount of workers is 1000. The growth rate of capital is 6,970%. The growth rate of labor is 100%. Find the GDP of Cobra Island. c)How much labor is there in Cobra Island one year after the initial year (or in 2001)? d)The growth rate of income is 1,089%. Find the Solow Residual. Do not give the answer as a percentage
- Based on your understanding, does additional input of Labor entails a steady increase in the output of a firm? Why or Why not? Support your answer using the concept of productionGive typing answer with explanation and conclusion Suppose an economy has an increase in labor input of 60 percent, while output has increased by 100 percent. Assuming no change in total factor productivity, calculate the percentage increase in the capital input. (Use the Cobb-Douglas production function Y = A K0.3L0.7)QUESTİON: Assume that we have a Cobb-Douglas type aggregate production function in the form: where : W=technology and r is standard share parameter of Cobb-Douglas production function.a. Find Marginal Rate of Technical Substitution (MRTS) between K and L. b. Why does (or does not) technology affects MRTS? Explain. c. Find output per effective labor; capital per effective labor (y=Y/WL and k= K/WL ). d. Find elasticity of substitution between K and L. Why does (or does not) the result different from the previous question (Question-1)?