...
)(49
0.2
) = 66 0.22
L = 50 ⇒ q = (100)(4
0.8
)(50
0.2
) = 66 2.89 ⇒ MP
L
= 2 .67
L = 51 ⇒ q = (100)(4
0.8
)(51
0.2
) = 66 5.52 ⇒ MP
L
= 2 .63
L = 52 ⇒ q = (100)(4
0.8
)(52
0.2
) = 66 8.11 ⇒ ... if L=2 then
q=9 .65 , and if L=3 then q=10.93. The marginal product of the second unit of
labor is 9 .6 5-8 =1 .65 and the marginal product of the third unit of labor is 10.9 3-...
... MP
L
= 12 - 2L (the slope of the production function).
Wage
Labor
20
40
60
80
100
120
1.5
3.0
4.5
6. 0
MRP
L
Figure 14 .6
Therefore, the MRP
L
= (10)(12 - 2L). The firm’s profit-maximizing ... 7 5-1 5= $60 per unit labor after the subsidy is received.
The profit maximizing values can be found as in parts a-c above:
π
=
TR
−
TC
=
p
q
−
wL
π
= 120*8* L
1
2
− 60 L
∂
π
∂L...
... invention
causes a constant-returns-to-scale production process for food to become a sharply-
increasing-returns process. How does this change affect the production-contract curve?
In the context ...
Chapter 16: General Equilibrium and Economic Efficiency
If, however, accompanying this change to a sharply-increasing-returns-to-scale
technology, there were a change in the trade-off betwee...
... catch is
F
1
+ F
2
= 6, 666 . At the price of $100 per ton, the value of the
catch is $66 6 ,60 0. The average catch for each of the 100 boats in the fishing fleet
is 66 .66 tons.
To determine ... determine the profit per boat, subtract total cost from total revenue:
π = (100) (66 .66 ) - 1,000, or π = $5 ,66 6.
2 96
Chapter 18: Externalities and Public Goods
278
CHAPTER 18...
... amount of food and clothing as in 1990. In 1995, 60 0 clothing and 60 0 food
would cost ($3) (60 0)+($2) (60 0)=$3000.
Therefore, the Laspeyres cost-of-living index is:
L = 100($3000/$1200) = 250. ... 489.9 clothing would cost $2939 .60 and Meredith
would still get 360 ,000 in utility.
We can now calculate the ideal index:
I = 100($2939 .60 /$1200) = 244.9.
36
Chapter 3: Consume...
... the increase in the price of the toll from $5 to
$7.
The lost consumer surplus is ( 7-5 )* 16+ 0.5( 7-5 )(2 0-1 6) =$ 36.
14. Vera has decided to upgrade the operating system on her new PC. She hears that ... P
2
Q
2
- P
1
Q
1
Δ
TR
cc
= (1.1P
1
)(0.8Q
1
) - P
1
Q
1
= -0 .12P
1
Q
1
, or a 12 percent decline.
For disk drives:
Δ
TR
dd
= P
2
Q
2
- P
1
Q
1
Δ
T...