5. Production Function Question: Why don't we care about production-maximization in the context of this course? a. There is no hard boundary to production-maximization. b. Maximizing production would simply demand E*=everyone, and K*=all of it. c. Without a cost function or any type of constraint, production-maximization is trivial. d. All of the above. 6. Profit Maximization by Choosing E* Suppose the hourly wage w=$25, the price of capital r=$20, and the price of output P=$100 in a perfectly competitive setting. Further, assume we are in the short run, and as such, capital is fixed at K=100 units. If the production function is Q=f(EK)=K1/2E1/2, what is E*, the optimal level of labor? (numbers only, if the answer is "10 workers", type "10" ONLY, without quotations) 7. Profit Maximization by Choosing E* Suppose the hourly wage w=$25, the price of capital r=$20, and the price of output P=$100 in a perfectly competitive setting. Further, assume we are in the short run, and as such, capital is fixed at K=100 units. If the production function is Q=f(E.K)=K1/2E1/2, what is the optimal level of profits? (numbers only, if the answer is "$10", type "10" ONLY, without quotations)

5. Production Function Question: Why don't we care about production-maximization in the context of this course? a. There is no hard boundary to production-maximization. b. Maximizing production would simply demand E=everyone, and K=all of it. c. Without a cost function or any type of constraint, production-maximization is trivial. d. All of the above. 6. Profit Maximization by Choosing E* Suppose the hourly wage w=$25, the price of capital r=$20, and the price of output P=$100 in a perfectly competitive setting. Further, assume we are in the short run, and as such, capital is fixed at K=100 units. If the production function is Q=f(EK)=K1/2E1/2, what is E, the optimal level of labor? (numbers only, if the answer is "10 workers", type "10" ONLY, without quotations) 7. Profit Maximization by Choosing E Suppose the hourly wage w=$25, the price of capital r=$20, and the price of output P=$100 in a perfectly competitive setting. Further, assume we are in the short run, and as such, capital is fixed at K=100 units. If the production function is Q=f(E.K)=K1/2E1/2, what is the optimal level of profits? (numbers only, if the answer is "$10", type "10" ONLY, without quotations)

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter12: Labor Markets And Labor Unions

Section: Chapter Questions

Problem 1.3P

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