Labor Economics
Labor Economics
7th Edition
ISBN: 9780078021886
Author: George J Borjas
Publisher: McGraw-Hill Education
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Chapter 3, Problem 10P
To determine

Identify the number of labors firm employed in the short run and the profit that will be earned by the firm.

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Suppose the hourly wage is $20 and the price of each unit of capital is $2. The price of output is constant at $20/unit. The production function and marginal product function, respectively, are shown below.     If the current capital stock is fixed at 2,500 units, how much labor should the firm employ in the short run? Show your work.
A widget manufacturer has a production function of the form q = 6L + 10K . If the wage rate (w) is $4 and the rental rate on capital (r) is $5. Are the returns to scale increasing, constant, or decreasing for this production function?   What cost minimization combination of K and L will the manufacturer employs to produce 300 units of output?   Suppose that the price of capital increases to $7 per unit. If manufacturer continues to produce 300 units,what cost minimization choice of inputs capital and labor should the firm used.   Suppose that the capital input is fixed at K = 3 units in the short run, what is the short run total cost function with q
A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm’s production function is: X=-0.2L3 + 18L2 + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A t what weekly output is marginal cost equal to average variable cost? if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
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