10. A firm uses a single input, labor, to produce output qaccording to the production function qt 8√ The commodity sells for $150 per unit and the wage rate is $75 per hour. quantity of L. Find the profit-maximizing Find the profit-maximizing quantity of q. What is the maximum profit? a. b. C. d. Suppose now that the firm is taxed $30 per unit of output and that the wage rate is subsidized at a rate of $15 per hour. Assume that the firm is a price taker, so the price of the product remains at $150. Find the new profit-maximizing levels of L, q, and profit.

10. A firm uses a single input, labor, to produce output qaccording to the production function qt 8√ The commodity sells for $150 per unit and the wage rate is $75 per hour. quantity of L. Find the profit-maximizing Find the profit-maximizing quantity of q. What is the maximum profit? a. b. C. d. Suppose now that the firm is taxed $30 per unit of output and that the wage rate is subsidized at a rate of $15 per hour. Assume that the firm is a price taker, so the price of the product remains at $150. Find the new profit-maximizing levels of L, q, and profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3) A paper factory signed contract to produce 1000 reams of paper each week for a customer. The paper plant's production function is Q = 4K0.75 L0.25, where Q is output (reams produced), K is the quantity of capital rented, and L is the quantity of labor hired. Each worker is paid $10 per hour and each machine rents for $60 per hour. a. What is the MRTSLK? Demonstrate. b. Find the optimal amount of Labor and capital that is needed to produce 1,000 reams per week. c. What is the firms' total cost of producing the 1,000 reams? d. Draw a diagram of the iso-quant and the iso-cost lines and identify the optimal input combination. e. Suppose the firm needs to increase production to 1,100. Without redoing the full analyses, determine how much additional labor and capital will be needed to achieve this. (This is a one-line answer).
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4 A production function is states as: 120Q1/3, with an output price of 25. Firms total revenue is stated as 11000Q1/2 with a labor supply of Q=15w. If you derive the monopsony equilibrium labor and monopsony wage what would they be.
Island City is located on a small island, while Plains City is located at the center of a large, ﬂat, featureless plain. Draw two labor-supply curves, one for each city. a. The supply curve for Island City is [steeper/ﬂatter] because. . . . b. The elasticity of supply of labor in Island City is [higher, lower].
Should a Heart Surgeon Do Her Own Plumbing? A heart surgeon is skilful at unplugging artenes and rerouting the flow of blood, and these skills also make her a very skilful plumber. She can clear a clogged drain in 6 minutes, about 10 times faster than the most skillful plumber in town Suppose the surgeon earns $20 per minute in heart surgery and the best plumber in town charges $100 per hour. a. Should the surgeon clear her own clogged drains? O A. No, her opportunity cost is too low. O B. No, her opportunity cost is too high. OC. Yes, her opportunity cost is too high. OD. Yes, her opportunity cost is too low b. How much does the surgeon gain by hiring the plumber to clear a clogged drain? S (Enter your response as an integer )
For a firm selling goods in a perfectly competitive market, the price of their output is A. equal to the marginal revenue product of labour B. equal to the marginal revenue product of capital C. equal to the marginal revenue associated with an additional unit of output D. equal to the marginal product of labour
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hg one car by two family members 7. Firm 1 produces output X with a cost function TC₁=X². Firm 2 produces output Y with a cost function TC₂ = Y2+ XY. Each firm faces perfectly competitive market for its product. The competitive price of good produced by firm 1 is px-26 PLN and the competitive price of good produced by firm 2 is py=22 PLN. The Pigouvian tax imposed on firm 1 should be: a) 2 PLN b) 6 PLN c) 3 PLN d) 5 PLN e) none of the above