Suppose that the government introduces a labor tax for each
Suppose that the Government introduces a labor tax: for each hour of labor hired, the firm needs to pay to the Government. Find the new optimal demand for labor. Is it higher or lower than in the absence of the tax?
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Over what range will changes in marginal cost have no effect on CDW’s profit-maximizing level of output?
Suppose that the production function is given by Y = C + KaN1-a where C is a positive constant. Does an increase in C affect the marginal product of any factor? Will it affect labor productivity?
If an agent is liquidity constrained, then an unexpected increase in transitory income of $100 can result in the agentís current consumption increasing by $100"
Assume that the price of the consumption good (denote it by P) is exogenously given and equal to 2. Use W to denote the hourly nominal wage in the economy
Suppose that the total benefit and total cost from an activity are, respectively, given by the following equations: B(Q) = 150 + 28Q – 5Q2 and C(Q) = 100 + 8Q. (Note: MB(Q) = 28 – 10Q and MC(Q) = 8.)
Consider now the decision problem of the agents. Let n denote the number of hours per month that an agent works. Write an equation relating n and l. Write the agents budget constraint. Express the budget constraint in terms of c and l. State the agen
Explain why this manager might nonetheless have a strong incentive to maximize the firm’s profits.
The accompanying graph (top of next page) summarizes the demand and costs for a firm that operates in a perfectly competitive market.
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