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Consider a two-sector general equilibrium of production system. Sector one’s unit cost function is c1 = w1/3r2/3 and that of sector two is c2 = w1/2r1/2, where w and r are the wage rate of labor and the rental rate of capital, respectively. Both the input and output markets are all characterized by
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- Consider the labor market in an imaginary coastal town called Nutsland. There is only one buyer in that market, namely Nutsland Farm that operates with a production function of Q= The supply of labor is given as L=w-2, where w is the wage. On the output side, Olive Farm takes the price P =20 TL/kg for its olive oil as given due to intense competition in that market. Find Olive Farm's profit-maximizing labor demand. What wage does it have to pay? What would be the wage in Nutsland if the market were competitive? Compare the welfare implications of a) versus b). Calculate the deadweight loss and show it on a graph.) Say you were interested in maximizing U = U(x,y) with the usual budget constraint, M = Px*x+Py*Y. Explain the comparative statics process for determining Do not perform the final ÔM calculation, only get as far as the Cramer's rule expression for ÔMPick the correct answer and explain in steps
- Consider the following production function for a firm: y=(x1-1)(x2-1), if x1≥1 and x2≥1; and y=0, if either x1<1 or x2<1: Find the firms supply function and verify the law of supply.Suppose the market supply curve is given by: Q=2P-4 and market demand by: 2-2 1-1. a) What is the value of Q when the market is equilibrium? Enter a number. b) P as a function of Q, i.e. find the inverse demand function. Your answer should be an algebraic expression in terms of Q without any decimals. Use a capital Q for Q and do not write "P="; just enter an expression in terms of Q. P= The variables found in your answer should be: [Q] c) Find the value of the consumer surplus when the market is equilibrium. Enter an algebraic expression, such as 3*In(4)-In(2)-8, rather than a decimal.Assume that we are in a long-run environment and a firm employs two groups of workers, medium-skilled and low-skilled (there is no capital used by this firm). Low-skilled workers are paid $7.25 per hour, whereas medium-skilled workers are paid $17. Assume that both groups of workers are normal inputs into the production process and the government increases the minimum wage to $15. Workers in the medium-skilled group are happy because they believe that the firm will increase their work hours now. Are the medium-skilled workers correct in their assessment? Explain why or why not. Do firms respond differently in the long run to a change in the minimum wage if minimum wage workers are considered normal inputs or inferior inputs into the production process? Fully explain your answer.
- Answer the question based on the following information: Suppose 20 units of product A can be produced by employing just labor and capital in the four ways shown below. Assume the prices of labor and capital are $2 and $3, respectively. Production Techniques I II III IV Labor 4 3 2 5 Capital 2 3 5 1 If the price of product A is $1.50, and the firm is producing efficiently the firm will realize Multiple Choice Economic profit of $30. Economic loss of $17. Economic profit of $20. Economic profit of $17. Economic profit of $43. Note:- Give me proper calculation and correct answer otherwise i give downvote Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.Problem 2: Production economy Consider a production economy with two firms, X and Y, and two factors of production, labor and capital. Firm X produces the output good X with a technology that can be de- scribed by the following production function: fx(lx, kx) = lx + kx, where lx is the quantity of labor and kx is the quantity of capital. Firm Y produces the output good Y with a technology that can be de- scribed by the following production funetion: fr(ly, ky) = y + VAy, where ly is the quantity of labor and ky is the quantity of capital. The economy has a total endowment of labor L > 0 and a total endowment of capital K = L. The price of the good X is p > 0 and the price of good Y is q = 1. These output prices are determined on international markets and are not affected by the supply decisions of the firms. (a) Find the set of production efficient allocations in this economy. Illus- trate the set of efficient factor allocations in a Bowley box diagram. Describe and illustrate the…Kwami and Adzga quit their jobs and decided to start a piggery joint venture business. The company processes and packs pork for sale. The output from this firm is described by the Cobb-Douglas production function, q=K¹/² A¹/2 Where q is the number of pigs processed in a quarter, K is the number of hours invested by Kwami in a quarter, and A is the number of hours invested by Adzoa in a quarter. Kwami and Adzoa value 1 hour of their time at $12 and $3 respectively based on what each was earning before quitting their jobs. a) Obtain the number of hours that Adzoa needs to invest (as a function of q and K) for 150 pigs to be processed in a quarter b) How many hours should Adzoa invest for 150 pigs to be processed in a quarter if it is known that Kwami invested 750 hours? c) The cost function for this company may be written as, C= vK + WA where v and w are unit costs for Kwami and Adzoa. wwwwwwww www Substituting for v and w gives C= 12K + 3A Express this cost of production function as a…
- a) Derive the goods market demand curve in terms of the output (Y) and the exogenousvariables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. b)Draw the Goods Market Equilibrium. Be sure to label all curves, label the equilibrium point, and label the slope of each curve. c)Solve for the equilibrium output (Y) in terms of the exogenous variables:c0,c1,b0,b1,g0,g1andT. Show your work for full credit. d)Supposeg1increases, but stillc1+b1+g1<1. Using a graph of the goods market, show how we would represent an increase in the value ofg1on equilibrium output y. Be sure to label all axes, curves, and equilibrium points. e)Suppose instead,c1+b1+g1= 0. Is the equilibrium in the goods market still possible? If so, what is the equilibrium output? You must explain your answer to receive full credit.Please ? helpplease help with question below, Explain the concept of increasing-opportunity-cost with constant returns to scale. In your answer, assume that more of the labor supply is allocated to production of labor-intensive good X and more of the capital stock is allocated to capital-intensive good Y.
