4) Labor Demand (33 marks) Assume the production function is a) (4 marks) What is the marginal product of labor (M P)?...
Assume the production function is q = f(h, k) = 2n12 a) (4 marks) What is the marginal product of labor (M Pn)?- b) (4 marks) What is the marginal product of capital (M Pk)?4 c) (8 marks) Assume p = 2, w = 1/2, and r = 3. Calculate the profit maximizing level of labor demand (h*). – d) (6 marks) If w increases to w = 3 (and p and r stay at p = 2 and r=...
QUESTION 5 The marginal product for labor is given (MP) = 3 – 0.02*L; price of the product is $100 and wage = 200. Based on information above, the marginal product of labor at the optimal level of employment is $3 $2 $1.5 $1 2 points QUESTION 6 If the labor elasticity of output is 0.5 and the capital elasticity of output is 0.9, then the production function exhibits constant returns to scale. economies of scale. diseconomies of scale. diminishing...
The demand function facing the monopolist is given by D(p) 10/p, and the monopolist has positive marginal cost of c. What is the profit-maximizing level of output?
The demand function facing the monopolist is given by D(p) 10/p, and the monopolist has positive marginal cost of c. What is the profit-maximizing level of output?
Question 2 (7 marks) A monopolist faces the demand for its product: p = a - bQ. The monopolist has a marginal cost given by c and a fixed cost given by F. Answer the following questions, while showing all of your derivation steps. Just providing final answer does not warrant any mark. 2-a) Assume that F is sufficiently small such that the monopolist produces a strictly positive level of output. What are the profit-maximizing price and quantity? (3 marks)...
(a) Consider the production function, q = 100K2L1.5 Calculate the marginal product of labor, MPL, and the marginal product of capital,MPK. (c) Suppose that in the short run, the level of capital is fixed at K = 15. Write out the total product of labor curve. What is the marginal product of labor when L = 100? (d) Now consider two input combinations, (K = 5, L = 100) and (K = 20, L = 25). Which of the two...
The table below shows the marginal product of labor at various employment levels. Assume this firm is part of a perfectly competitive market and that the market price for the good is $10. Labor Marginal Product of Labor 1 10 2 8 3 7 4 5 5 3 6 1 What is the value of the marginal product of labor at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage...
of 3 The nation of Ectenia has 20 production function and the marginal product of labor in each orchard s describe the 100L-12 MPL100-2L Now, suppose the price of apples is back at $2 per apple, but a hurnicane destroys half the orchards so only 10 orchards remain. Recall that each orchard's labor demand as a function of the daily wage is L. -s0-0.25w. What is the market's labor demand? 0 L=500-5w L=50-025 w 0に100-5W OL-500- 2.5W Ectenia continues to...
3. Consider the production function y= . Assume r 1. (a) Show that the production function y(x) is concave. (b) Show that the inverse production function r(y) is convex (c) The price of y is p 10. Find the firm's total product TP(x), marginal product MP(a) and average product AP(a) (d) Find the firm's value of marginal product VMP(a), and value of average product VAP(r) (e) Assume w < marVAP (x) Find the firm's input demand curve r*(w) (f) Suppose...
what is the marginal product of the third hour of labor?
4) The following is a hypothetical short-run production function: Hours of Total Marginal Labor Output Product 100 100 240 What is the marginal product of the third hour of labor? A) 60 B) 80 C) 100 D) 240 Wote your answers in the table below: Question Answer Question Answer Question Answer Question Answer 16 12 13 18 19 15 20 21 Bonus 22 Bonus 1) Assume the following information...
1). Consider the production function Q= 10*L0.4 * K0.5 a.) Find the marginal product of labor. b.) Find the marginal product of capital. c.) Is there diminishing marginal product of capital? d.) Find MRTS. e.) If w = 10 and r = 20, find the relationship between optimal level of capital and labor to be used.