True/False/Uncertain and Explain - Input output models unrealistically assume perfectly elastic factor supply curves, so the results obtained from input-output models are invalid. Elaborate.

Dynamic efficiency refers to an allocation such that no further shuffling of extraction across periods will increase the sum of the present discounted values of the firm’s stream of future profits. If there are just two periods in the story, explain why the allocation of a scarce exhaustible resource that maximizes the present discounted value of profits across two periods will involve more extraction in the first period and less extraction in the second period, rather than an equal amount in both periods.

Solve the attachment.

Question Labour is a variable input into the production process. In this sense, a change in the amount of labour used in production (the number of employee hours) lead to a proportionate change in labour costs. However, some other labour-related costs may also occur. a) Define "quasi-fixed costs" and give three examples of them. b) Assume a t-period of setting. Write down the mathematical expression that describes the profit-maximizing employment rule of a firm when there exist quasi-fixed costs. Explain what this expression means. c) Consider a firm that only exists for one period. The value of labour's (L) marginal product is given by VMP₁ = P × MP₁, where P is the price of output, and MPL = 10 0.5L. The wage rate is $10. Assume that there are no hiring or training costs. If the firm expects the price of output to be $10, what is the optimal level of employment? If the firm hires these workers, but then finds out that the price of output is $5, what will the firm do? Hint: If there…

A firm faces a production function with inputs capital (K) and labor (L): K¹/2 L¹/4 F(K, L) The amount of capital used for production is determined at the beginning of the year. The prices of K and L are v and w respectively. =