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Could somebody please do this problem for me. I would like tosee it done so I can understand the process. I have a test on thismaterial coming up real soon and would like to see this done. Thankyou!!
Problem 1: Firm Behavior: Consider a firm whose productionfunction is of the formyt =Atkt1/4nt3/4
where yt is real output in period t, kt iscapital input in period t, and nt is labor input inperiod t. The price of output is 1 and let all variables, includingwages and interest rates be in real terms. The firm is infinitelylived. At is total factor productivity of the firm inperiod t, which is exogenous to the firm. Assume that Atgrows at rate a, that is, At+1 = (1 + a)At;where A0 (that is, At at time 0) is 1.
a. Based on the two-period model covered in class, write down thefirms budget constraint in period t.b. Derive the firm's demand for labor in period t as a function ofwages, interest rates and a.c. Derive the firm's demand for investment (not kt butthe change in kt) in period t as a function of wages, interest rates and a.d. Explain briefly how an increase in a would change your answers in parts b and c.
There is a monocentric town that is shaped in a circle. The yearly rent for land in the CBD there is $36,000 per dunam. The value of the agricultural land on the outskirts of the town is $1,500 per dunam. The cost to travel in the town is $310 per..
General price inflation is estimated to be 3% for the next 5 years, 5% the 5 years after that, and 8% the following 5 years. If you invest $10,000 at 10% for those 15 years, what is the future worth of your investment in year-0-dollars at that tim..
During 2006 a leading auto manufacturer produced 20 million of minivans. However due to soaring gas prices the sale of mini vans becomes sluggish and by the end of 2006 only 16 million of mini vans are sold. what is the gdp of mini vans is
Consider a nation that produces only one final good: oranges. In 2010 the nation's orange producers sold a total of 100 oranges at a price of $2 per orange. In 2011 the nation's orange producers sold a total of 300 oranges at a price of $4 per oran..
Suppose that you believe the fundamental value of Wal-Grey stock is about to rise from $50 to $100 because of its new management team. You have $20,000 that you can risk in the market, where the market interest rate is 6%. You can think of four po..
The government introduces a subsidy s=10 per unit of sugar exported and at the same time it doesn't let any imports in. Calculate the new (i) domestic price, consumption and production, (ii) world price and quantity exported by the country. What w..
Suppose a firm produces its output in two different plants. Production costs at plant 1 are given by C1 = 4(Q1)2, where Q1 is the amount of production at plant 1. The production costs at plant 2 are given by C2 = 2(Q2)2
Based on market research, a film production company in Ectenia obtains the following information about the demand and production costs of its new DVD: Demand: P=1000-10Q Total Revenue: TR=1000Q-10QZ
Find the Herfindahl index for an industry composed of (a)three firms-one with 70 percent of the market, and the other two with 20 and 10 percent of the market, respectively; (b) one firm with a 50 percent share of the market and 10 other equalsize..
Suppose Ann is working on a project with John. Both must decide whether to put into a decent amount of effort into the project. Since Ann is the leader of the project, her contribution determines whether the project will be successful.
What is the equivalent present value of the following series of payments: $7000 the first year, $6500 the second year, $6000 the third year, $5500 the fourth year, and $5000 the fifth year The interest rate is 10%, compounded annually.
Suppose you want to buy a car. Sale price of the car is $18,427. You can afford to make a down payment of $3,427. The net amount to be financed is $15,000. If the dealer offers 6 year at 6.25% APR (compound monthly), what would the monthly payment..
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