1. In the resource market, say labor, who is on the demand side and who is on the supply side? What is the difference between monetary flows and real flows? 2a. Assume, the wage rate for Labor = $20/hour and capital cost is $10/hour, find out the cost for techniques 1 and 2. 2b. Assume, the wage rate for Labor = $10/hour and capital cost is $20/hour, find out cost techniques 1 and 2 Capital needed Labor needed 10 Technique 1 Technique 2 8 2 What conclusion do you derive from the above example?

1. In the resource market, say labor, who is on the demand side and who is on the supply side? What is the difference between monetary flows and real flows? 2a. Assume, the wage rate for Labor = $20/hour and capital cost is $10/hour, find out the cost for techniques 1 and 2. 2b. Assume, the wage rate for Labor = $10/hour and capital cost is $20/hour, find out cost techniques 1 and 2 Capital needed Labor needed 10 Technique 1 Technique 2 8 2 What conclusion do you derive from the above example?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter13: General Equilibrium And Welfare

Section: Chapter Questions

Problem 13.9P

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