Size of the plants or the amount of capital equipment

Assignment Help Microeconomics
Reference no: EM13685959

A firm has two plants, one in Mexico and one in the United States and it cannot change the size of the plants or the amount of capital equipment. The wage in Mexico is $5. The wage in the U.S. is $20. Given current employment, the marginal product of the last worker in Mexico is 100, and the marginal product of the last worker in the U.S. is 500.

1) If it is not, what should the firm do?

2) Is the firm maximizing output relative to its labor cost? Show how you know.

Reference no: EM13685959

Questions Cloud

What types of audits they apply : What types of audits they apply to.
What is the absolute size of its public debt : Presume that a country has no public debt in year 1 however experiences a budget deficit of $20 billion in year 2, a budget deficit of $20 billion in year 3, a budget surplus of $10 billion in year 4, and a budget deficit of $2 billion in year 5. Wha..
Non-cumulative preference shares : Dividends in areas pertain to non-cumulative preference shares?
Fields of study behavioural economics and neuro economics : To increase marginal utility, you should decrease consumption (everything else held constant). This statement is correct, even though it sounds strange. Describe why. What is the purpose of the two fields of study behavioural economics and neuro econ..
Size of the plants or the amount of capital equipment : A firm has two plants, one in Mexico and one in the United States and it cannot change the size of the plants or the amount of capital equipment. The wage in Mexico is $5. The wage in the U.S. is $20.
Goal of maximizing the value of stock : Goal of maximizing the value of stock conflict with other goals
Which element of internal control deals with establishing : Which element of internal control deals with establishing procedures for things such as handling of income checks
The partnership liquidation : The partnership liquidation.
Hamilton profit margin be if blaine were dropped : What would Hamilton's profit margin be if Blaine were dropped?

Reviews

Write a Review

Microeconomics Questions & Answers

  Currently keeping large quantities of excess reserves

Why are banks currently keeping large quantities of excess reserves? What are the monetary policy implications of banks keeping large quantities of excess reserves? In particular how does it change the efficacy of open market operations?

  In light of ricardian model how might you estimate claim by

suppose that the price of labour rises. explain how producers would respond using the isocostisoquant framework. what

  Example of a positive or a negative externality

In the absence of an agreement between the landowner and his neighbors, is he likely to harvest too much or too little of his timber at any given time? Characterize this as an example of a positive or a negative externality.

  What is another action the government can take that would

If an effort to “maintain national security” government demands the wheat growers in America to produce Qs=16million pounds per year. The market can be expressed as P=120-3Qd and P=5Qs. What is the result of the government’s actions?

  The firm instead rents saucepans every period

Consider the pricing problem of Alcoa's cookware division. Suppose that the world last for only two periods, period 1 and period 2. A saucepan last two periods, so that a saucepan that is bought in period 1 can also be used in period 2. Consumers val..

  Find which monetary regimes is least likely to succeed

If this country wants to reduce its inflation rate, state which of the following monetary regimes is least likely to succeed: exchange rate target, money supply target, nominal interest rate policy. Which approach is most likely to succeed

  1 los angeles retail market for widgets is fiercely price

1. los angeles retail market for widgets is fiercely price competitive. the typical retailer has the following total

  What is meant by limit pricing a assume the firm produces

what is limit pricing? a suppose your firm produces a product at a constant marginal cost equal to 1. suppose the

  How do you think the principles of price elasticity

How do you think the principles of price elasticity of demand might be applied to the pricing of public goods? Explain your reasoning and assumptions, as well as how it might affect efficiency.

  Calculate the net present value and benefit-cost ratio

Calculate the net present value and benefit-cost ratio for four different discount rates

  Fundamentals of demand and supply

A. In 1996, many cows in Great Britain came down with "mad cow disease". As a result, the nations of European union banned the import of British beef.

  Explain-conservationists want to save too many spotted owls

Consider this statement: “Conservationists want to save too many spotted owls.” Use graphical analysis accompanied by a concise narrative discussion.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd