1. Suppose a worker can survive by daily consumption of $40 value of commodities as determined by the socially necessary labor time of 4 hours. If the total value of produced commodities by him in 8 hours equals $100, a) The paid wage to the worker in the Marxian framework is to be $ b) The unpaid wage to the worker in the Marxian framework is to be $ c) The constant capital (Transferred value of capital such as machinery and raw materials) will be

1. Suppose a worker can survive by daily consumption of $40 value of commodities as determined by the socially necessary labor time of 4 hours. If the total value of produced commodities by him in 8 hours equals $100, a) The paid wage to the worker in the Marxian framework is to be $ b) The unpaid wage to the worker in the Marxian framework is to be $ c) The constant capital (Transferred value of capital such as machinery and raw materials) will be

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

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2. Consider the production function given by Y= altbK. The prices of labor and capital are wLand wK, respectively. a. Find the conditional input demand for L and K b. Find the cost function C. How will an increase in wk affect the labor demand in a? Show graphically d. If K is fixed at 10, find the conditional labor demand
Suppose that this conveyor-manufacturing firm has another location and would like you to evaluate the input mix decisions at this new location. Here is all you know about the newlocation. The marginal rate of technical substitution is currently 0.5. The marginal product of labor at its target level of output is 60 rollers per hour. What is the marginal product of capital? Ifthe rental rate for capital is $24 per hours at this location and the wage paid to labor is $12 per hour, could this location be minimizing the costs of producing its target level of output? Explain briefly.
3. Theo employs labor at a competitive wage (W) of $3 per unit, and he employs capitalat a competitive rental rate (R) of $6 per unit.a. State the cost-minimizing rule. You must provide both a written statement of it, and state it as anequation.b. At Theo’s current combination of labor and capital, the marginal product of labor (MPL) is twiceas large as the marginal product of capital (MPK). Is Theo currently employing the optimal ratio oflabor and capital? If not, how should he adjust his hiring of labor and/or capital? Explain.
Consider a firm for which production depends on two normal inputs, labor and capital, with prices w and r, respectively. Initially the firm faces market prices of w = 6 and r = 4. These prices then shift to w = 4 and r = 2.a. In which direction will the substitution effect change the firm’s employment and capital s tock?b. In which direction will the scale effect change the firm’s employment and capital stock?c. Can we say conclusively whether the firm will use more or less labor? More or less c apital?
• Assume that a firm is using the cost-minimizing combination of its only 2 inputs, capital and labor. If the price of a unit of capital is $200 and the price of a unit of labor is $50, what is the MPL of the last unit of labor if the marginal product of the last unit of capital is 2,000?
AnimoSpace Support ? Question 4 Given the isocosts and isoquants of various quantities of labor and capital in the ficure below, which of the ff. is correct? Сapital TC4 TC3 TC2 MP IP = M TC K* R° ISO3 ISO? ISOI Labour L* Quantity that can be produced at ISO3 is less than the quantity that can be produced at ISO2 sr O Ris the combination of L&K that minimizes cost O At least 2 of the choices O None of the Choices O TC3>TC1 a No new data to save. Last checked at 7:59pm o search PrtSc Del F6 F7 F8 F9 F10 Fl1 F12 F2 F3 F4 F5 A+ Pause Scr Lk SysRq Ins #
1. Optimal Use of a Single Input. Julian Smyth manages production at Taffy Apple Inc., a company that produces a variety of taffy/fruit candies. Over the last several months, he has varied the number of employees on his caramel apple production line from 5 to 12, and found the following relationship. Labor S67∞a 5 8 9 10 11 12 TP 50 90 150 200 240 270 290 300 MP VMP a. In the column labeled MP, calculate the marginal product of labor. b. Suppose the apples sell for $6 per (dozen) box. Calculate the Value Marginal Product (VMP) c. If labor costs $200 per day, how many laborers should the firm hire? Number
Explain how a firm’s production function is related toits marginal product of labor, how a firm’s marginalproduct of labor is related to the value of its marginalproduct, and how a firm’s value of marginal productis related to its demand for labor
in your own Words How do the concepts of income and substitution effects enhance our understanding why annual hours worked have tended to fall over time"
QUESTION 2 K 6 isocost 3 L Based on the information in the graph aboive, what is the slope of the isocost line? # If the price of capital remains the same and the price of labor decreases, the isocost line will With the current mix of labor and capital, the marginal technical rate of subsitution is MRTS-3. If the prices of labor and capital remain as shown in the graph, then the firm will minimize the cost of production by +
Question 7 According to the production model, what happens if there is an increase in total factor productivity and simultaneously a decrease in population? capital per worker does not change output per person decreases O capital per worker decreases output per person increases D Question 8 In the production model, an increase in the exogenous supply of labor, from L to L'.L'> L) causes which of the following in the labor market: O An shift to the left of the supply of labor curve and an upward movement along the demand for labor curve, so wages increase. A shift to the right in the demand for labor curve and an upward movement along the supply of labor curve, so wages increase. O Ashift to the right of the supply of labor curve and a downward movement along the demand for labor curve, so wages fall O Ashift to the left in the demand for labor curve for labor and a downward mavement along the supply of labor curve, so wages fall,
a) ChrisNaan Company produces fruit smoothies for students at the University of Ghana. Suppose its production function is given by y = LK/10, where L and K are labour and capital, respectively. Suppose the factor prices are w = 10, and r = 100, where w and r are wages and rental cost, respectively. i. Find the marginai product of labour and capital. ii. What is the marginal rate of technical substitution? iii. Now suppose that under a new scheme introduced by the Government of Ghana to ehcourage fruit intake by students, ChrisNaan Company is provided with an amount of C2,000,000 as cost for the programme. Determine the maximum quantity of fruit smoothies that can be produced by ChrisNaan Company. %3D