Show work... Suppose that the production function is Y=9With this production function, the marginal product of labor is MPN 4.5 KBThe labor supply curve is NS= 105 x [(1 - fxwf, where w is the real wage rate, t is the tax rate on labor income, and hence (1-f)xw is the after-tax real wage rateThe capital stock is K= 25.Assume that the tax rate on labor income, t. equals zeroThe equilibrium level of the real wage isThe equilibrium level of employment is(Round your answer to two decimal places)(Round your answer to one decimal place).

In economics, a production function gives the technological relation between quantities of physical…

Suppose that the production function is Y=SRN- With this production function, the marginal product of labor is PN - 4.5/ The labor supply curve is NS-105x1 - fxwf, where is the real wage rate is the tax rate on labor income, and hence (1-fxwis the after-tax real wage The capital stock is K-25 Assume that the tax rate on labor income, tequals zero The equilibrium level of the real wage is The equilibrium level of employment is (Round your answer to two decimal places) (Round your answer to one decimal place)

Suppose that the production function is Y=SRN- With this production function, the marginal product of labor is PN - 4.5/ The labor supply curve is NS-105x1 - fxwf, where is the real wage rate is the tax rate on labor income, and hence (1-fxwis the after-tax real wage The capital stock is K-25 Assume that the tax rate on labor income, tequals zero The equilibrium level of the real wage is The equilibrium level of employment is (Round your answer to two decimal places) (Round your answer to one decimal place)

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 7E

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What is the marginal product of capital (MPK) for the following production function Q = min {L, K} ? O MPK = 1 if LK MPK = 0 if LK O MPK = 0 if L
Suppose that the production function is Y = 9 K0.5N0.5 With this production function, the marginal product of labor is MPN = 4.5 KO.5/NO.5. The labor supply curve is NS = 105 x [(1 - t)xwP, where w is the real wage rate, t is the tax rate on labor income, and hence (1 - t)xw is the after-tax real wage rate. The capital stock is K= 25. Assume that the tax rate on labor income, t, equals zero. The equilibrium level of the real wage is (Round your answer to two decimal places). The equilibrium level of employment is (Round your answer to one decimal place).
Q1. Suppose we are given the constant returns-to-scale CES production function q = [k + l]1/ where k represents capital and l represents labora. a. Show that MPk = (q/k)1 and MPl = (q/l)1 . b. Show that RTS = (k/l)1 ; use this to show that elasticity of substitution between labor and capital= 1/(1 – ). c. Determine the output elasticities for k and l; and show that their sum equals 1.Note: Output elasticity measures the response of change in q to a change in any input. Elasticity of output wrt k is eq,k = %q/%k = (q/k)*(k/q) or (q/k)*(k/q) or lnq/lnkSimilarly for elasticity of output wrt l, eq,ld. Prove that q/l = (q/l) and hence that ln(q/l) = ln(q/l)
11. Suppose that the production function is Y=K^(0.5) N^(0.5). With this production function the marginal product of labor is MPN=0.5K^(0.5) N^(-0.5). The capital stock is K=100. The labor supply curve is NS=100(w^2), where w is the real wage and NS denotes the quantity of labor supplied. Compute the equilibrium level of employment (N). 12. Consider Question 11 again. Compute the level of full-employment output (Y). Approximate your answer to the next integer. 13. Consider Question # 11 again. Due to a temporary reduction in immigration, the economy's labor supply curve changes to NS=90(w^2). A policy maker suggests that in order to increase full-employment output in response to the reduction in immigration the government might temporarily subsidize the firm's labor cost by paying a fractions of the wage it pays to a worker. That is, if the real wage received by a worker is w, the firm only pays a portion (1-s)w with the remaining sw coming from the government. Compute the subsidy s…
5. This is the sequel to a question on the previous P-set that used this aggregate production function Y = A x VK x VL For this entire problem assume A = 2. Fill in the table below showing the marginal product of labor (MPL) for each level of capital and labor. MPL when K = 3 MPL when K = 5 4 6. 7 What is the MPL when K = 3 and L = 7?
Consider a production function Q-AL KP (00 None of the other answers are correct.
A producer has the following technology.y= 6K^(1/2)L^(1/2) a) Prove formally that the production function exhibits constant returns to scale (use “λ” argument). b) Find analytically MPL and MPK. Is MPL increasing, decreasing, or constant inL? Is MPK increasing, decreasing, or constant in K? c) Short-run: Given stock of capital ̄K= 1 find labor demand (formula) of a competitive firm. Find equilibrium real wage rate if labor supply is given by Ls= 9 (one number). d) Assume again ̄K= 1 and that Ls= 9. The government adopts a real minimum wage of wmin/p=(3/2). Find labor demand (one number) and the unemployment rate (one number). Please depict the equilibrium on a graph with the real wage on the vertical axis and labor on the horizontal axis, indicating the equilibrium quantity of labor, wage, and unemployment, as well as the relevant curves. e) Find the cost function given prices of inputs wK= 4 and wL= 1 (formula). Plot the cost function on a graph, indicating the slope of the cost…
Q1. Suppose we are given the constant returns-to-scale CES production function q = [k + l]1/ where krepresents capital and l represents labora. Show that MPk = (q/k)1 and MPl = (q/l)1 .b. Show that RTS = (k/l)1 ; use this to show that elasticity of substitution between labor and capital= 1/(1 – ).c. Determine the output elasticities for k and l; and show that their sum equals 1.Note: Output elasticity measures the response of change in q to a change in any input.Elasticity of output wrt k is eq,k = %q/%k = (q/k)*(k/q) or (q/k)*(k/q) or lnq/lnkSimilarly for elasticity of output wrt l, eq,ld. Prove that q/l = (q/l) and hence that ln(q/l) = ln(q/l)Q2. Suppose the production of airframes is characterized by a CobbDouglas production function: Q =LK. The marginal products for this production function are MPL = K and MPK = L. Suppose the price oflabor is $10 per unit and the price of capital is $1 per unit. Find the cost-minimizing combination of labor and capital if the manufacturer wants to…
During the 1920s, Charles Cobb and Paul Dougkas modeled totalproduction output P (of a firm, company or entire economy) as a function of labourhours involved x and capital invested y (each includes the monetary worth of allbuildings and equipment). The Cobb-Douglas production function isP(x, y) = k x^α y^(1−α),where k ad α are constants representative of a particular firm or economy.(1) Show that doubling of both labor and capital results in doubling productionP.(2) Suppose a particular firm has the production function for k = 120 andα =3/4. Assume each unit of labor costs $250 and each unit of capital costs$400, and that the total expense for all costs cannot exceed $100,000. Findthe maximum production level for the firm.(3) Compute the production level at x = 64 and y = 81. If the capital isdecreased by 3 units, by how many units the labor should be adjusted toso that there is not change in production level.
Consider an economy with production function given by Y = AK0:5L0:5 where A is the total factorproductivity (TFP), K is the capital stock and L is the labor input. For simplicity assume capital is xed and equal to 1. Assume A=100.a. Write the rm's problem of choosing labor demand. Derive the demand for labor as a functionof the real wage.b. Assume labor supply is inelastic and xed at L= 100. Find the equilibrium values of the wageand the employment level for this economy. Display graphically the labor supply and the labordemand curves. Carefully label your graph.c. Suppose the economy faces a positive productivity shock and TFP is now A=200. Displaygraphically the new labor demand function. What are the equilibrium values of employment andthe real wage?d. Compute the total output when A=100 and when A=200. What is the output's growth rate?Compare that growth rate with the growth rate in A. How does the growth rate of output percapita compares to the growth rate in A? Explain…
Question2 Imagine that you own a company that is a price taker with the production function: q= = f(L, K) = L0.25 K0.75 a. What is the MPL ? What does this mean economically? b. What is the MPK? What does this mean economically? c. What is the MRTS? What does this mean economically? d. Does this production function have constant, increasing, or decreasing returns to scale? e. What is the short run supply function for the firm? f. What is the derived labor demand for the firm? g. What is the price elasticity of supply? What does this mean economically? h. How does supply shift when the price of labor changes? What does this mean economically? i. What is the price elasticity of labor demand? What does this mean economically? j. How does derived labor demand change when the price of labor changes? What does this mean economically?
please sir solve these 3 questions 33- If an increase in the price of one good leads to a fall in the quantity demanded of other than these goods are complementry good A- True B- False 34- the production function is a purely technical relationship between input and output A- True B- False 35- marginal proudact is defined as the change in TP resulting from the employment of an additional unit of a varibal factor: A- True B- False