6. Suppose the hourly wage is $40, the price of each unit of capital is $50,...
6. Suppose the hourly wage is $40, the price of each unit of capital is $50, and the price of output is $100 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is so that the marginal product of labor is MPE 2E a. If the current capital stock is fixed at 1,600 units, how many hours of labor should the firm hire in the short run (i.e., what should E...
Suppose the hourly wage is $40, the price of each unit of capital is $50, and the price of output is $100 per unit. Assume that the firm cannot affect any of these prices The production function of the firm is 6. so that the marginal product of labor is MPE 2E a If the current capital stock is fixed at 1,600 units, how many hours of labor should the firm hire in the short run (ie., what should &...
Suppose the hourly wage is $10, the price of each unit of capital is $20, and the price of output is $60 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is 7. a. Find the MPE (4 pts) b. If the firm is maximizing profits, what must the ratio of MPE to MPK be? What must the ratio of E to K be? Hint MPK-dQ/dK 1/3K23 E (2 points) c....
7. Suppose the hourly wage is $10, the price of each unit of capital is $20, and the price of output is $60 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is a. Find the MPE (4 pts) b. If the firm is maximizing profits, what must the ratio of MPE to MPK be? What must the ratio of E to K be? Hint MPK-dQ/dK 1/3K 23 E1S ( points...
7. Suppose the hourly wage is S10, the price of each unit of capital is S20, and the price of output is S60 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is a. Find the MPE (4 pts) b. If the firm is maximizing profits, what must the ratio of MPE to MPK be? What must the ratio of E to K be? Hint MPK-dQ/dK 1/3K-23E13 (2 points) c. Find...
7. Suppose the hourly wage is $10, the price of each unit of capital is $20, and the price of output is $60 per unit. Assume that the firm cannot affect any of these prices. The production function of the firm is a. Find the MPE (4 pts) b. If the firm is maximizing profits, what must the ratio of MPE to MPK be? What must the ratio of E to K be? Hint MPK-dQ/dK- 1/3K 23 E13 (2 points)...
Suppose the hourly wage is $10 and the price of each unit of capital is $25. The price of output is constant at $50 per unit. The production function is f(E,K) = E1/2K1/2 What is the marginal product of labor? What is the value of the marginal product of labor? If the current capital stock is fixed at 1600 units, how much labor should the firm employ in the short run?
In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the following table. Suppose that for the firm, the goods market is perfectly competitive. The market price of the product is $4 at each quantity supplied by the firm. Labor Supplied Total Physical Product Hourly Wage Rate ($) Total Wage Cost Marginal Factor Cost 10 100 5 50 − 11...
Suppose labor (L) and capital (K) are fixed proportion inputs, and that each unit of output must be produced with exactly 5 units of labor and 2 unit of capital. The price of a unit of labor is w, and the price of a unit of capital is r. a. Write down the production function. b. Derive the equation for the expansion path. c. Derive the equation for the long-run total cost function. d. Graphically depict the labor demand curve....
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...