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Could somebody please do this problem for me. I would like tosee it done so I can understand the process. I have a test on thismaterial coming up real soon and would like to see this done. Thankyou!!
Problem 1: Firm Behavior: Consider a firm whose productionfunction is of the formyt =Atkt1/4nt3/4
where yt is real output in period t, kt iscapital input in period t, and nt is labor input inperiod t. The price of output is 1 and let all variables, includingwages and interest rates be in real terms. The firm is infinitelylived. At is total factor productivity of the firm inperiod t, which is exogenous to the firm. Assume that Atgrows at rate a, that is, At+1 = (1 + a)At;where A0 (that is, At at time 0) is 1.
a. Based on the two-period model covered in class, write down thefirms budget constraint in period t.b. Derive the firm's demand for labor in period t as a function ofwages, interest rates and a.c. Derive the firm's demand for investment (not kt butthe change in kt) in period t as a function of wages, interest rates and a.d. Explain briefly how an increase in a would change your answers in parts b and c.
A person has an expected utility function of the form U(w)=w^1/2.He has an initial wealth of $25.He also has a lottery ticket that will be worth $75 with probability 1/2 and will be worth $0 with probability 1/2.
a. Calculate net exports. b. Use the expenditure approach to calculate GDP. c. Use the income approach to calculate GDP. d. Calculate net domestic product (at factor cost). e. Calculate net domestic income (at market price..
A series of 10 annual payments of $7,500 is equivalent to three equal payments at the end of years 6, 10, and 15 at 15% interest compounded annually. What is the amount of these three equal payments
Now suppose the city council of Metropolis decides to curb congestion in the downtown area by limiting the number of taxis to 6. Applicants participate in a lottery and size winners get a medallion (a permanent license). What is the new equilibriu..
TC= 41,000,000+0.005Q 2 MC= TC/ Q =$500 +0.01Q calculate profit maximizing activity level and optimal profit, and optimal profit as percentage of sales revenue. profit maximization problem
A bulldozer can be purchased for $380,000 and used for 6 years, when its salvage value is 15% of the first cost. Alternatively, it can be leased for $60,000 a year. Remember that lease payments occur at the start of the year.
Each existing firm and every potential entrant faces an identical U-shaped average cost curve. The minimum level of average cost is $10 per ton and occurs when a firm produces 5 million tons of cobalt per year.
Your accountants tell you that it costs $400 to set up an immunization program at a preschool and immunize one child against polio. It will cost $460 to immunize 20 more children.What is the cost per child for these additional 20 children
Suppose that fixed costs increase by $50 but the prevailing market price remains unchanged. Using algebra determine the effects of this change in cost on the profit maximizing output and the optimal profit. Do you see any change from your answer t..
CH 12 (10%) Suppose that a monopoly faces inverse market demand function as P = 70?2Q, and its marginal cost function is MC = 40 - Q. Please answer the following two questions: a. What should be the monopoly's profit-maximizing output
Two production lines are under evaluation. One uses waterjet cutting technology and has an initial cost of $100,000 , an annual operating cost of $10,000 , a useful life of 5years, and a salvage value of $70,000 at the end of 5years.
Consider a seller who values a car at $9,500 and a buyer who values the same care at $10,000. What total surplus will result from a transaction between the two when the seller is faced with the follow sales tax rates: 0%, 2%, 4%, 6%, and 8%
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