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Suppose that a firm faces the following production function: How much capital per worker should the...
Exercise 1 Question B3 (2010) function: A firm faces the following production The firm is perfectly...
Exercise 1 Question B3 (2010) function: A firm faces the following production The firm is perfectly competitive and hires its machines at a constant rental rate of r = 5 euros per hour and its workers at a constant wage rate of w 4 euros per hour. It can also sell as much output as it wishes at the ruling market price of P 40 euros. 1 Find the most profitable output, the profits at this output, and the corre-...
Suppose a firm has the production function Q = 50KL with MP, = 50K and MP,...
Suppose a firm has the production function Q = 50KL with MP, = 50K and MP, = 50L . 1) If the wage rate is $10 per unit of labor and the rental rate of capital is $5 per unit of capital, how much capital and labor should the firm employ in the long run to minimize the cost of producing 40,000 units? 2) Using the solution in part 1), what will the firm's long-run total cost be?
3. Suppose a firm has the production function Q = 50 KL 1) If the wage...
3. Suppose a firm has the production function Q = 50 KL 1) If the wage rate is $10 per unit of labor and the rental rate of capital is $5 per unit of capital, how much capital and labor should the firm employ in the long run to minimize the cost of producing 40,000 units? 2) Using the solution in part 1), what will the firm’s long-run total cost be?
1. Suppose the production function in an economy is Y- of capital and L is the...
1. Suppose the production function in an economy is Y- of capital and L is the amount of labor. The economy begins with 8I units of capital and 16 units of labor. a. Suppose also, that one more unit of labor is added to the production process every year for the next four years. What is the marginal product of labor for each year? b. Now, suppose the wage paid per hour is $1.13, the rental price of capital is...
Problem 3. Suppose that output in the economy can be defined by the following production function...
Problem 3. Suppose that output in the economy can be defined by the following production function F(K,N) VKAN, where A is the technology parameter that remains constant at A 10. Labor force grows at 4% per annum, the capital depreciation rate equals 16% and people consume 90% of their income. a) b) c) d) Find the intensive form of the production function (per worker). Find the steady-state level of capital per worker and output per worker. Present the appropriate graph....
Question #3: Solow Model with Technological Progress Suppose than the economy's per effective worker production function...
Question #3: Solow Model with Technological Progress Suppose than the economy's per effective worker production function is given by y=Ros. Assume that the savings rate (8) is equal to 16 percent, the depreciation rate (8) is equal to 10 percent, the population growth rate (n) is equal to 2 percent and the rate of technological growth (g) is equal to 4 percent. (a) Find the steady-state value of capital per effective worker (K). (b) Find the steady-state value of output...
Use the function above to show how much output per worker can be produced from the...
Use the function above to show how much output per worker can be
produced from the following amounts of capital per worker:
K/N
= {0, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50}
1.) Using the multipoint curve drawing
tool,
draw a curve showing the relationship between
Y/N and K/N
by using the above function and the values for
K/N.
Assume you are given the following production function that relates output per worker to capital per worker:...
4. (2 points) Suppose the per-worker production function for an economy is given by y =...
4. (2 points) Suppose the per-worker production function for an economy is given by y = 1040-3. The depreciation rate is 18%, the savings rate is 27%, and the growth rate of labour hours in 7% (a) The steady state capital stock per worker in the economy is? (b) The steady-state income per worker for this economy is?
Suppose the firm's production function is Q = K1/3L2/3. a. If the rental rate of capital...
Suppose the firm's production function is Q = K1/3L2/3. a. If the rental rate of capital R = $30 and the wage rate W = $40, what is the cost-minimizing capital-to-labor ratio? b. If the rental rate of capital R is $35 and the wage rate W is $70, and assuming the same production function, how many units of labor and capital should the firm use to produce 12 units of output? c. What is the total cost of producing...
3. Suppose that the production function is given by Y=0.5VKVN (a) Transform the production function into...
3. Suppose that the production function is given by Y=0.5VKVN (a) Transform the production function into a relationship between output per worker and capital per worker (b) Derive the steady-state levels of capital per worker and output per worker in terms of the saving rate (s) and the depreciation rate (8) (c) Derive the equation for steady-state consumption per worker in terms of s and 8
Exercise 1 Question B3 (2010) function: A firm faces the following production The firm is perfectly competitive and hires its machines at a constant rental rate of r = 5 euros per hour and its workers at a constant wage rate of w 4 euros per hour. It can also sell as much output as it wishes at the ruling market price of P 40 euros. 1 Find the most profitable output, the profits at this output, and the corre-...
Suppose a firm has the production function Q = 50KL with MP, = 50K and MP, = 50L . 1) If the wage rate is $10 per unit of labor and the rental rate of capital is $5 per unit of capital, how much capital and labor should the firm employ in the long run to minimize the cost of producing 40,000 units? 2) Using the solution in part 1), what will the firm's long-run total cost be?
1. Suppose the production function in an economy is Y- of capital and L is the amount of labor. The economy begins with 8I units of capital and 16 units of labor. a. Suppose also, that one more unit of labor is added to the production process every year for the next four years. What is the marginal product of labor for each year? b. Now, suppose the wage paid per hour is $1.13, the rental price of capital is...
Problem 3. Suppose that output in the economy can be defined by the following production function F(K,N) VKAN, where A is the technology parameter that remains constant at A 10. Labor force grows at 4% per annum, the capital depreciation rate equals 16% and people consume 90% of their income. a) b) c) d) Find the intensive form of the production function (per worker). Find the steady-state level of capital per worker and output per worker. Present the appropriate graph....
Question #3: Solow Model with Technological Progress Suppose than the economy's per effective worker production function is given by y=Ros. Assume that the savings rate (8) is equal to 16 percent, the depreciation rate (8) is equal to 10 percent, the population growth rate (n) is equal to 2 percent and the rate of technological growth (g) is equal to 4 percent. (a) Find the steady-state value of capital per effective worker (K). (b) Find the steady-state value of output...
Use the function above to show how much output per worker can be
produced from the following amounts of capital per worker:
K/N
= {0, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50}
1.) Using the multipoint curve drawing
tool,
draw a curve showing the relationship between
Y/N and K/N
by using the above function and the values for
K/N.
Assume you are given the following production function that relates output per worker to capital per worker:...
4. (2 points) Suppose the per-worker production function for an economy is given by y = 1040-3. The depreciation rate is 18%, the savings rate is 27%, and the growth rate of labour hours in 7% (a) The steady state capital stock per worker in the economy is? (b) The steady-state income per worker for this economy is?
3. Suppose that the production function is given by Y=0.5VKVN (a) Transform the production function into a relationship between output per worker and capital per worker (b) Derive the steady-state levels of capital per worker and output per worker in terms of the saving rate (s) and the depreciation rate (8) (c) Derive the equation for steady-state consumption per worker in terms of s and 8
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