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Consider an economy with the following Cobb–Douglas production function: Y 5 5K 1/3 L 2/3 .
a. Derive the equation describing labor demand in this economy as a function of the real wage and the capital stock. (Hint: Review Chapter 3.)
b. The economy has 27,000 units of capital and a labor force of 1,000 workers. Assuming that factor prices adjust to equilibrate supply and demand, calculate the real wage, total output, and the total amount earned by workers.
c. Now suppose that Congress, concerned about the welfare of the working class, passes a law setting a minimum wage that is 10 percent above the equilibrium wage you derived in part (b). Assuming that Congress cannot dictate how many workers are hired at the mandated wage, what are the effects of this law? Specifically, calculate what happens to the real wage, employment, output, and the total amount earned by workers.
clearly show on youre graph the old equlibrium price and quantity. Can you tell for certain whether the new equlibrium price will be higher or lower than the old equilibrium price?briefly explain.
Elucidate how much profit does an individual producer make in a month. Is this a long-run equilibrium.
A rolled model product company purchased a machine for ram clambering large I- beam. The company expects to bend 95 beam at $2000 per beam in each of the first year, after which company expects to bend 125 beams per year through 9 years. If the compa..
Mexico also which being free to pollute gives industries in Mexico an economic advantage over those in the U.S. also Canada.
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A US automobile factory uses $100,000 worth of parts purchased from foreign countries along with U.S. inputs to produce 30 cars worth $20,000 each. Twenty of these cars are sold and 10 are left in inventory. How much did these actions add to GDP?
Suppose that you were an industry analyst trying to determine if the leading firms in the automobile manufacturing industry are playing a tit-for-tat pricing game. What real world data would you want to examine? What would you consider to be evidence..
If John and Jose are not able to recognize and respect cultural differences, they may contribute to the emergence of which type of conflict?
Assume that a 1- year discount bond (bond A) with a face value of $1,000 is currently trading at PV = $938.97, and another 2-year discount bond (bond B) with identical risk features and face value is currently trading at $834.01. Please calculate the..
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