LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 3, Problem 15P
(a)
To determine
Explain the changes in the domestic and foreign labor in order to restore the given condition.
(b)
To determine
Explain the three policies that the domestic country could employ if it wants to reverse the outflow of labor.
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A purely competitive firm has a single variable input < (labor), with the wage rate. W0 per period. Its fixed inputs cost the firm a total of F dollars per period. The price of the product is P0.
(a) write the production function, revenue function, cost function, and profit function of the firm.
(b) what is the first-order condition for profit maximization ?
Give this condition an economic interpretation.
(c) What economic circumstances would ensure taht profit is maximized rather tahtn minimized?
Answer each of the following questions as either true or false. For a statement to be “true,” it must always be true. If there is at least one case where the statement is not true (or if you need more information to be sure), answer “false.” You must justify each answer with an appropriate explanation or counterexample (which may include a relevant diagram). A firm can make widgets using capital and labor according to the production function f(K,L) = 100L + 0.5K. Denote the wage w and the rental rate on capital r. If r is sufficiently high, the firm will not hire any capital, no matter how many widgets it wants to produce.
A purely competitive firm has a single variable input L (labor), with the wage rate W0 per period. Its fixed inputs cost the firm a total of F dollars per period. The price of the product is P0.
(a) write the production function, revenue function, cost function, and profit function of the firm.
(b) What is the first-order condition for profit maximization? Give this condition an economic interpretation.
(c) What economic circumstances would ensure that profit is maximized rather thatn minimized?
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