Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 11, Problem 1P
(a)
To determine
The marginal product of each additional worker hired.
(b)
To determine
The consistency of the relationship between the output and marginal product with the ‘Law of diminishing returns’.
(c)
To determine
The total laborers hired by a competitive firm when the price is
(d)
To determine
The optimal number of workers if the price falls to
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7. The production function for a price-taking firm is given by q = 2.5k0.4L0.4. What are the demand functions for labor 1(v,w.p) and capital k(v,w,p)?
[Show your work]
8. The production function for a price-taking firm is given by q = 2.5k0.4L0.4. What is the supply function q(v,w,p)?
[Show your work]
Suppose that the production function of the firm is:
Q = 100L1/2.K1/2
K= 100, P = $1, w =$50. and r = $40. Determine the quantity of labor that the firm should hire in order to maximize the profits. What is the maximum profit of this firm?
Suppose that the production function of the firm is:Q = 100L1/2 . K1/2K= 100, P = $1, w = $50 and r = $40. Determine the quantity of labor that the firm should hire in order to maximize the profits. What is the maximum profit of this firm?
Chapter 11 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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