Problem
1. Why does a profit-maximizing firm hire workers up to the point where the wage equals the value of marginal product? Show that this condition is identical to the one that requires a profit-maximizing firm to produce the level of output where the price of the output equals the marginal cost of production.
2. Why is the short-run demand curve for labor downward sloping?
3. What mix of inputs should be used to produce a given level of output?