What do we mean by an exit price? What is the exit price if r = $100 and w= $2000? Explain. Now suppose wages (w) falls. At what value of w will the firm switch from K into L? Use the isocost - isoquant figure to explain. Does a lower w change the exit-price? If so, how? Explain.
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- A5 Course: Microeconomics - Cost and Production A firm produces shoes using L (labor) and machines (K). Its production function is Q = K1/3 L2/3. Assuming K fixed at 8, price of capital (r) is $4 and wage(w) is $2, find and plot the short-run cost curves. Also show that CMeT (AMC) reaches its value at the level of production where it equals Marginal Cost (MC). And show that CMeT (AMC) is ALWAYS decreasing at the beginning due to fixed cost. Demonstrations should use the necessary calculations.(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. I would like questions i,ii,iii answered please.(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases abov
- 28 - The most important factor affecting a firm's production decision is the state of the supply curve. Which of the following is not a contributing factor?A) Weather conditionsB) investment surplusC) Economic GrowthD) WarE) Cost shocks12 true or false The point at which the marginal product of a variable input is at a maximum corresponds to the point at which marginal cost is at a maximumMANAGERIAL ECONOMICS 3. Explain the meaning of: a) Individual Consumer Demand, b) Market Demand, and c) Market Demand faced by a company; then explain how a company relates its product selling price policy with the price elasticity of market demand it faces; even better if it is accompanied by a graphical explanation
- 21) A grocery store employs fewer clerks after prices dropped for self-checkout machines used to collect customers money. In this example, labor and capital are considered a. complements. b. dependent. c. independent. d. substitutes. e. supplements.Question 3 (a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100.Question 16 When is it not in the best interest of a company to hire additional workers in the short run? when the average product of labor is decreasing when the firm is in Stage II of the production process when the marginal revenue product equals zero when the wage rate is equal to or greater than labor's marginal revenue product
- Capital Labour Total product Average product marginal product 3 0 0 3 1 5 3 3 21 3 5 30 3 7 30 3 9 27 i) Find the Average product and marginal product ii)at the employment of how many units of labour do diminishing returns set in iii) Explain what is meant by the law of diminishing returns iv) Concerning price elasticity of supply ,draw diagrams on unit elastic supply and relatively elastic supply1. The law of diminishing returns indicates that:a. as extra units of a variable resource are added to a fixed resource the marginalproduct will decline beyond some point.b. because of economies and diseconomies of scale a competitive firm's long-runaverage cost curve will be U-shaped.c. the demand for goods produced by purely competitive industries is downsloping.d. beyond some poi 4. Which situation below describes the increasing returns stage of the productionfunction?a. Hiring one more tailor results in three more suits produced per hour.b. Hiring one more baker results in the same output because there is now less thanone oven available per baker.c. Buying one more office computer causes there to be more computers thanworkers.d. Extending the workday results in more tired and less productive workeMultiple choice - microeconomics 45) Refer to Figure 13-2. What does the changing slope of the total-cost curve reflect? A. decreasing marginal cost B. decreasing marginal product C. decreasing average variable cost D. decreasing average total cost 44) What distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm? A. In the short run the size of the factory is fixed B. In the short run there are no fixed costs C. In the short run the number of workers used to produce the firm’s product is fixed. D. In the short run output is not variable.
