Suppose a firm uses two factors of production: males and females. The two factors of production...
Suppose a firm uses two factors of production: males and females. The two factors of production always have different MPs and assume that Wm < Wf and that the firm can hire as many females and males at their wage rates. Also, assume that males and females are not perfect substitutes for each other in production:
a. Show on a diagram optimal amount of female and male labor firm would like to employ to minimize costs given q0 (put female labor on horizontal axis and males on vertical axis)
b. Draw a diagram with a potential mix of two inputs given same q0 when firm has strong preference for male employees. What wil happen to this firm in the long run? Why?
c. What are potential benefits and costs of affirmative action in this case?
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Suppose a firm uses two factors of production: males and
females. The two factors of production...
Suppose two inputs are perfect substitutes. In order to minimize production costs, the producer will simply...
Suppose two inputs are perfect substitutes. In order to minimize production costs, the producer will simply have to employ the cheapest input. a. True b. False
A firm is unlikely to hire a worker if: A. the additional output a firms gets...
A firm is unlikely to hire a worker if: A. the additional output a firms gets by hiring the worker is greater than his or her wage. B. there are diminishing marginal returns to labor. C. the minimum wage set by law is less than the equilibrium wage in the market. D. the additional revenue generated by hiring the worker is less than his or her wage. In a competitive labor market, the equilibrium wage rate is determined by: A....
4. Suppose a firm uses only one input (L) to produce output y, with the production...
4. Suppose a firm uses only one input (L) to produce output y, with the production function y L Suppose the firm sells its output in a competitive market at price p, and buys labor in a competitive market at price w. a. Write an expression for the profits of the firm as a function of w, p, and L. b. What is the marginal cost of hiring an additional unit of labor? Graph the marginal cost of labor curve...
QUESTION 2 Suppose there are two types of restaurant workers--high-skill chefs and low-skill servers. There are...
QUESTION 2 Suppose there are two types of restaurant workers--high-skill chefs and low-skill servers. There are 1000 males and 1000 females in the labour force, and each group has an identical distribution between high-skill and low-skill workers. The two diagrams below show an initial outcome in each labour market. Assume there is no discrimination based on gender. Well Wapet p Hour Quantity of Law Q (4) Chefs a) Explain why wages paged to Chefs (left graph) are higher than wages...
4. Consider a firm that uses both labor and capital in production. The price of capital...
4. Consider a firm that uses both labor and capital in production. The price of capital is $20 per unit and the wage rate is S10 per hour. a. Draw the firm's isocost line assuming a total production cost of $100. How steep is this line (that is, what is its slope)? Be sure to clearly label the axes. (3 points) b. Suppose the wage drops to $5 per unit. In which direction does the substitution effect change the firm's...
4. Consider a firm that uses both labor and capital in production. The price of capital...
4. Consider a firm that uses both labor and capital in production. The price of capital is $20 per unit and the wage rate is $10 per hour. Draw the firm's socost ine assuming a total production cost of $100. How steep is this line (that is, what is its slope)? Be sure to clearly label the axes. (3 points) b. Suppose the wage drops to S5 per unit. In which direction does the substitution effect change the firm's demand...
Suppose a firm has the following production function: Q = 2K L. The marginal product of...
Suppose a firm has the following production function: Q = 2K L. The marginal product of capital is 2L, and the marginal product of labor is 2K. Assume that capital rents for $100 per unit per day, that labor can be hired for $200 per unit per day, and that the firm is minimizing costs. a. The firm will hire units of labor and - units of capital. b. What is the total cost of producing 60 units of output?...
6. Suppose there are two types of restaurant workers — high-skill chefs and low-skill servers. There...
6. Suppose there are two types of restaurant workers — high-skill chefs and low-skill servers. There are 1000 males and 1000 females in the labour force, and each group has an identical distribution between high- skill and low-skill workers. The two diagrams below show an initial outcome in each labour market. Assume there is no discrimination based on gender. a) As shown in the figures, the wage paid to chefs is higher than the wage paid to servers. What explains...
Practice Problem 1 (continued from Chapter 21) A firm produces computers with two factors of production:...
Practice Problem 1 (continued from Chapter 21) A firm produces computers with two factors of production: labor(I) and capital (k). Its technology is represented by the production function -0.1lk Suppose that the prices of the inputs are 10 and 100 dollars, respectively. What is the firm's long run supply curve? Suppose further that the amount of capital is fixed at 1 unit. What is the firm's short run supply curve? (b)
4. A firm produces computers with two factors of production: labor L and capital K. It's...
4. A firm produces computers with two factors of production: labor L and capital K. It's pro- duction function is y 10 . Suppose the factor prices are wL = 10 and wk = 100. (a) Graph the isoquants for y equal to 1,2, and 3. Does this technology show increasing, constant, or decreasing returns to scale? Why? (b) Derive the conditional factor demands. (c) Derive the long-run cost function C(y). (d) If the firm wants to produce one computer,...
4. Suppose a firm uses only one input (L) to produce output y, with the production function y L Suppose the firm sells its output in a competitive market at price p, and buys labor in a competitive market at price w. a. Write an expression for the profits of the firm as a function of w, p, and L. b. What is the marginal cost of hiring an additional unit of labor? Graph the marginal cost of labor curve...
QUESTION 2 Suppose there are two types of restaurant workers--high-skill chefs and low-skill servers. There are 1000 males and 1000 females in the labour force, and each group has an identical distribution between high-skill and low-skill workers. The two diagrams below show an initial outcome in each labour market. Assume there is no discrimination based on gender. Well Wapet p Hour Quantity of Law Q (4) Chefs a) Explain why wages paged to Chefs (left graph) are higher than wages...
4. Consider a firm that uses both labor and capital in production. The price of capital is $20 per unit and the wage rate is S10 per hour. a. Draw the firm's isocost line assuming a total production cost of $100. How steep is this line (that is, what is its slope)? Be sure to clearly label the axes. (3 points) b. Suppose the wage drops to $5 per unit. In which direction does the substitution effect change the firm's...
4. Consider a firm that uses both labor and capital in production. The price of capital is $20 per unit and the wage rate is $10 per hour. Draw the firm's socost ine assuming a total production cost of $100. How steep is this line (that is, what is its slope)? Be sure to clearly label the axes. (3 points) b. Suppose the wage drops to S5 per unit. In which direction does the substitution effect change the firm's demand...
Suppose a firm has the following production function: Q = 2K L. The marginal product of capital is 2L, and the marginal product of labor is 2K. Assume that capital rents for $100 per unit per day, that labor can be hired for $200 per unit per day, and that the firm is minimizing costs. a. The firm will hire units of labor and - units of capital. b. What is the total cost of producing 60 units of output?...
6. Suppose there are two types of restaurant workers — high-skill chefs and low-skill servers. There are 1000 males and 1000 females in the labour force, and each group has an identical distribution between high- skill and low-skill workers. The two diagrams below show an initial outcome in each labour market. Assume there is no discrimination based on gender. a) As shown in the figures, the wage paid to chefs is higher than the wage paid to servers. What explains...
Practice Problem 1 (continued from Chapter 21) A firm produces computers with two factors of production: labor(I) and capital (k). Its technology is represented by the production function -0.1lk Suppose that the prices of the inputs are 10 and 100 dollars, respectively. What is the firm's long run supply curve? Suppose further that the amount of capital is fixed at 1 unit. What is the firm's short run supply curve? (b)
4. A firm produces computers with two factors of production: labor L and capital K. It's pro- duction function is y 10 . Suppose the factor prices are wL = 10 and wk = 100. (a) Graph the isoquants for y equal to 1,2, and 3. Does this technology show increasing, constant, or decreasing returns to scale? Why? (b) Derive the conditional factor demands. (c) Derive the long-run cost function C(y). (d) If the firm wants to produce one computer,...
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