Reference no: EM1373724
A medium sized bakery has just opened in Slovakia. A loaf of bread is currently selling for fourteen koruna [Slovakian currency] over and above the cost of intermediate goods [floor, yeast, and so on]. Suppose that the labor is only variable factor of production, the following table gives the production function for the bread.
WORKERS LOAVES OF BREAD
0 0
1 15
2 30
3 42
4 52
5 60
6 66
7 70
[A] Assumee the current wage rate in Slovakia is 119 koruna per hour. How many workers will the bakery employ?
[B] Assume the economy of Slovakia begins to grow, incomes rise, and the price of a loaf of bread is pushed up to 20 koruna. Assuming no increase in the price of labor, how many workers will the bakery hire?
[C] An increase in the demand for labor pushes up wages to 125 koruna per hour. What impact will this increase in cost have on employment and output in the bakery at the 20-koruna price of bread?
[D] If all firms behaved like our bakery, would the allocation of resources in Slovakia be efficient? Describe you answer.
|
Explain the appropriate discretionary fiscal policy
: The economy has seen unemployment rate raise from 6% to 9.5%, the inflation rate decrease from 2.8% to 1.2%, and there has been a 24% decline in consumer spending and a 45% decline in investment spending in the same time period.
|
|
Compute the marginal revenue product
: Assume the following payoff matrix in which the numbers indicate the profits in millions of dollars for a duopoly based either on a high price or a low price strategy.
|
|
Can investment tax credits decrease employment
: Many states give companies with an investment tax credit that effectively decrease the value of capital. In theory these credits are designed to stimulate new investment and thus create jobs.
|
|
Describe the consequences of government overspending
: When watching at our economy, you will determine that government expanding is very important to our overall output of our economy.
|
|
Determining efficient level of labour
: A medium sized bakery has just opened in Slovakia. A loaf of bread is currently selling for fourteen koruna over and above the cost of intermediate goods
|
|
Comparing the unemployment rate
: A spike in unemployment rate - the largest in more than 2-decades - increased new concerns Friday that a weak labor outlook, high oil prices and continuing woes in housing and credit markets are leading the United States economy into a painful recess..
|
|
Analyzing profits
: Realizing that the major function of benefit is to allocate resources according to consumer preferences, why are some groups in United States extremely critical of companies that earn increasing benefits
|
|
Computing onset of diminishing marginal product
: The number of repairs manufactured by a computer repair shop depends on the number of employees as follows:
|
|
Explain difference between push and pull systems
: Explain the difference between push and pull systems and what are the main disadvantages of MRP method?
|