Microeconomics Answers

If a firm uses only capital and labour, show why the cost minimising the combination of inputs sets:

Illustrate and explain using diagrams, the difference between long-run supply in a constant
cost individual firm and industry and an increasing cost firm and industry.

K and L are the amounts of capital and labor used in the production process. The price of labor and capital are given by w and r respectively. Q is the level of output produced. Use the midpoint method for all elasticity calculations.
P K L w r Q
1 100 100 100 100 100
2 99 105 95 100 105
3 102 103 95 105 110
A. Using data from periods 1 and 2, compute the own-wage (w) elasticity of labor demand.
B. Using data from periods 2 and 3, compute the cross- elasticity of labor demand with respect to the price of capital (r). Are capital and labor gross substitutes or gross complements?
C. Using data from periods 1 and 2, compute the elasticity of substitution of labor and capital.

Given the demand equation, Q = 120000 -10P2 (a) for this equation, write the expression for the point price elasticity of demand as a function of P (b) Over what range of the prices is the demand inelastic?

A bicycle manufacture faces a horizontal demand curve . the firm's total cost are given by the equation . TVC = 150Q - 20Q2 + Q3 where Q is the quantity. Below what price should the firm shut down opera

Assuming a constant wage rate, illustrate and explain using a diagram, how a firm’s
marginal costs of production are at a minimum when its marginal product is at a maximum;

[5 points] For what values of β is the marginal product of labor increasing in the amount of labor used? For what values of β is it decreasing? For which values of β does the Law of Diminishing Marginal Returns hold? Why? [Hint: You might consider the values of β for which the partial derivative of the marginal product of labor with respect to the amount of labor used is positive to answer the first part of the question

Suppose that the supply curve for econometrists is given by w = 10 + 5L, while the demand curve is given by w = 50 - 3L, where w = annual earnings in thousands of dollars per year and L = thousands of econometrists.

A. Find the equilibrium wage and employment levels.
B. Now suppose that the demand for econometrists increases and the new demand curve is w = 70 – 3L. Assume that this market is subject to cobwebs because it takes about three years to produce people who specialize in econometrics. While this adjustment is taking place, the short –run supply of econometrists is fixed. Calculate the wage and employment levels in each of the first five rounds.
C. Find the new long-run equilibrium wage and employment levels
D. Draw a graph of the cob web model above with clear labeling of wage and corresponding employment level in each round.

Why have average hours worked per week declined?

what is the diffrence between efficiency of labour and division of labour