XYZ Co operates in a competitive market. Its production function is q = L?K?. The exponents, ? and ?, are both less than one. The firm's capital is fixed, and it takes the wage and price as given
Derive the firm's short-run demand for labor as a function of K, w, and p. How does the firm react to an increase in the wage rate?
MPL = αLα-1Kβ. The firm sets w = p(αLα-1Kβ). Rearranging to solve for L yields
L = (w/pαKβ)1/(α-1).
Since a < 1, L increases when p and K increase, and decreases when w increases.
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The federal government began officially measuring poverty in the
A) 1860s. B) 1900s. C) 1930s. D) 1960s.
At equilibrium, quantity demanded equals quantity supplied
a. True b. False Indicate whether the statement is true or false
After getting a raise at work, Jennie now regularly buys steak instead of hamburger. Based on this behavior, we can assume:
A. steak is a normal good, and hamburger is an inferior good for Jennie. B. steak and hamburger are - normal goods for Jennie. C. steak is an inferior good, and hamburger is a normal good for Jennie. D. steak and hamburger are complementary goods for Jennie.
Suppose that opportunity costs in India and Thailand are constant. In India, maximum feasible hourly production rates are either 0.3 unit of cloth or 0.2 unit of food. In Thailand, maximum feasible hourly production rates are either 0.5 unit of cloth or 0.5 unit of food. It is correct to state that
A. Thailand has a comparative advantage in producing cloth. B. India has a comparative advantage in producing both cloth and wheat. C. India has a comparative advantage in producing cloth. D. India has no comparative advantage in producing cloth or wheat.