4. What must the relationship between marginal productivities and input prices if a firm is not choosing the optimal bundle of inputs but instead is hiring too much labor relative to the optimum?
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- What is the difference between a fixed input and a variable input?If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?A firms marginal cost curve above the average variable cost curve is equal to the films individual supply curve. This means that every time a firm receives a price from the market it will be willing to supply the amount of output where the price equals marginal cost. What happens to the films individual supply curve if marginal costs increase?
- Consider a firm that produces output using industrial robots and skilled labor. Suppose it is the case that a reduction in the price of industrial robots causes the firm's labor demand curve for skilled workers to increase (i.e., to shift to the right). This implies that: There is diminishing marginal product of robots. O There is diminishing marginal product of skilled labor. O Robots and skilled labor are complements. O Robots and skilled labor are substitutes. The unit cost of skilled labor is below the unit cost of robots.can someone pls explain if marginal product function (i.) and (ii) are either convex or concave? what is their economic implication?Consider a firm that produces a single output good Y with two input goods: labor (L) and capital (K). The firm has a technology described by the production function f : R? → R+ defined by f(1, k) = Vĩ + vk, where l is the quantity of labor and k is the quantity of capital. (a) In an appropriate diagram, illustrate the map of isoquants for the firm's production function. (b) Does the firm's technology satisfy the following properties: (i) strict monotonicity (i.e., are the marginal product of labor and the marginal product of capital strictly positive), (ii) the no-free-lunch property, (iii) constant/decreasing/increasing returns to scale? (iv) 1
- The slope of an isocost line is equal to the Select one: O a. O b. and is negative of the ratio of input prices; constant decreases as we move down the line; the ratio of the marginal products O c. is constant; the ratio of the marginal products O d. increases as we move down the line; the ratio of input pricesAdam operates a small shop specializing in party favors. He owns the build- ing andsupplies all of his own labor and money capital. Adam incurs no explict rental or wagecost. Before starting his own bussines Adam earned $1,000 per month by renting outthe store and earned $2,500 per month as a store manger for a lrge departmentstore chain. Because Adam use his own money capital, he also sacrificed $1,000 permonth interest earned on U.S government treasury bonds. Adam’s monthly revenuesfrom operating his shop are $10,000 and his total monthly expense for labor andsupplies amounted to $6,000. Calculate Adam’s monthly accounting and economic profitsA chair manufacturer hires its assembly-line labor for $5 an hour and calculates that the rental cost of its machinery is $10 per hour. Suppose that a chair can be produced using 4 hours of labor or machinery in any combination. If the firm is currently using 2 hours of labor for every two hours of machine time, is it minimizing its cost of production? If so, why? If not, how can it improve the situation? The firm O A. is currently minimizing its cost of production because its marginal rate of technical substitution is greater than the ratio of input prices. O B. is not currently minimizing its cost of production because the ratio of the marginal product of labor to the marginal product of capital is less than the ratio of the wage rate to the rental cost. O C. is currently minimizing its cost of production because its marginal rate of technical substitution equals the ratio of input prices. O D. is not currently minimizing its cost of production because the marginal product of labor…
- 5 föt the factors of production be labor and capital equipment. A competitive firm is facing the following input prices: the wage rate is wi = $8 per hour and the rental rate of capital is w2 = $16 per hour. At the current input mix the marginal product of labor is 24 and that of capital is 32. Should the firm change its input mix? Why?Economics Consider ADNOC decreasing the hourly wage rate (i.e., hourly salary) to all workers employed in her oil factories. Which of the following state OA All Cost curves, except the Fixed Cost, will shift upwards O B. All Cost curves, except the Fixed Cost, will shift downwards OC. All Cost curves (i.e., Fixed, Variable and Total) will shift upwards O D. All Cost curves (i.e., Fixed, Variable and Total) will shift downwardsA small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm O A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. O B. is not maximizing profit because the marginal revenue product of labor is less than the wage. O C. is maxinmizing profit because the marginal product of labor is greater than the wage. O D. is not maximizing profit because the price of the output is not equal to the wage. O E. is not maximizing profit because the marginal product of labor is greater than the wage.
