23 Jun Fill in the blanks in column 3 of the
Fill in the blanks in column 3 of the table by computing the marginal product of labor for each level of labor usage.
b. Fill in the blanks in column 4 of the table by computing the marginal revenue product for each level of labor usage.
c. How much labor should the manager hire in order to maximize profit? Why?
d. Fill in the blanks in column 5 of the table by computing marginal cost.
e. How many units of output should the manger produce in order to maximize profit? Why?
f. Fill in the blanks in column 6 with the profit earned at each level of labor usage.
g. Do your answers to parts c and e maximize profit? Does it matter whether the manager chooses labor usage or chooses output in order to maximize profit? Why?
h. How much labor should the manager hire when the wage rate is $20? How much profit is earned? Is marginal product greater or less than average product at this level of labor usage? Why does it matter?
Q2: CH 11 (15%)
Suppose you won a hoe remodeling company. You are currently earning short-run profits. The home remodeling
industry is an increasing-cost industry. In the long run, what do you expect will happen to
a. Your firms costs of production? Explain.
b. The price you can charge for your remodeling services? Why?
c. Profits in home remodeling? Why?
Q3: CH 12 (15%)
Higher unemployment caused by the recession and higher gasoline prices have contributed to a substantial reduction during 2008 in the number of vehicles on roads, bridges, and in tunnels. According to The Wall Street Journal (April 28, 2009), the reduction in demand for toll bridge and tunnel crossing created a serious revenue problem for many cities. In New York, the number of vehicles traveling across bridges and through tunnels fell from 23.6 million in January 2008 to 21.9 million in January 2009. “That drop presents a challenge, because road tolls subsidize MTA subways, which are more likely to be used as people get out of their cars.” In an apparent attempt to rise toll revenue, the MTA increased tolls by 10 percent on the nine crossings it controls.
a. Is MTA a monopolist in New York City? Do you think MTA possesses a high degree of market power? Why or why not?
b. If the marginal cost of letting another vehicle cross a bridge or travel through a tunnel is nearly zero, how should the MTA set tolls order to maximize profit? In order to maximize toll revenue? How are these two objectives related?
c. With the decrease in demand for bridge and tunnel crossings, what is the optimal way to adjust tolls: raise tolls,
lower tolls, or leave tolls unchanged? Explain carefully?
Q4: CH 12 (20%)
The Ali Baba Co. is the only supplier of a particular type of Oriental carpet. The estimated demant for its carpets is
Q = 112,000 – 500P + 5M
Where Q = number of carpets, P = price of carpets (dollars per unit), and M = consumers income per capita. The estimated average variable cost function for Ali Babas carpets is
AVC = 200 – 0.012Q + 0.000002Q2
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.