Determine graphically wage rate and allocation of labor

Assignment Help Macroeconomics
Reference no: EM13868584

The marginal product of labor curves corresponding to the production functions in problem 2 are as follows:

Workers Employed

MPL in Sector 1

MPL in Sector 2

10

15.1

15.9

20

11.4

10.5

30

10

8.2

40

8.7

6.9

50

7.8

6

60

7.4

5.4

70

6.9

5

80

6.6

4.6

90

6.3

4.3

100

6

4

a. Suppose that the price of good 2 relative to that of good 1 is 2. Determine graphically the wage rate and the allocation of labor between the two sectors.

b. Using the graph drawn for problem 2, determine the output of each sector. Then con?rm graphically that the slope of the production possibility frontier at that point equals the relative price.

c. Suppose that the relative price of good 2 falls to 1.3. Repeat (a) and (b).

d. Calculate the effects of the price change from 2 to 1.3 on the income of the speci?c factors in sectors 1 and 2.

Reference no: EM13868584

Questions Cloud

Impedances in star formation : A 400V symmetrical three phase source with grounded neutral supplies a load comprising three impedances in star formation. The impendence have the following values:
Responsive to the scenario and its five messages from pat : Write a 1,050- to 1,400-word memo, in memo form, that is fully responsive to the scenario and its five messages from Pat. Be careful to follow the instructions presented by Pat at various points in Scenario One
Calculate total revenue : A firm charges $800 per unit for its unique solar panel. If total revenue is $56,000 in July, how many solar panels were sold in July? (Hint: How do you calculate total revenue?)
Initial and ending equilibrium price and quantity : The crop of hops in the Yakima Valley has been greatly affected by the recent forest fires in the state of Washington, and craft breweries in the Northwest turn to hops from Germany as a substitute for Washington hops. How would you illustrate this c..
Determine graphically wage rate and allocation of labor : Suppose that the price of good 2 relative to that of good 1 is 2. Determine graphically the wage rate and the allocation of labor between the two sectors.
Our legal system uses combination of government regulation : Our legal system uses a combination of government regulation and industry self-regulatin as a means of promoting the quality of care (QOC). Discuss the differences and provide your opinion on what you believe is the best method of promoting QOC.
Discuss the impact the increased volatility in interest : Discuss the impact the increased volatility in interest and foreign exchange rates has on global institutions
What is the minimum line of credit that cbm will need? : What is the minimum line of credit that CBM will need?
Establishing a sense of urgency : Develop a strategy that illustrates how you would address each of the eight (8) stages of change: Establishing a sense of urgency and Creating coalition

Reviews

Write a Review

Macroeconomics Questions & Answers

  Competition in an oligopoly than other forms of market

Evidence suggests that there is less price competition in an oligopoly than other forms of market structure. Why is this the case?

  What monetary policies do you think caused the crisis

What monetary policies do you think caused the crisis What were the effects of the policies implemented in reaction to the crisis Do you think the solutions worked in the short term In the long term

  Calculate the price level and cost of borrowing money

measure used to calculate the price level and measure used to calculate the cost of borrowing money.

  Calculation of equilibrium and price ceiling quantities

Based on your calculation of equilibrium and price ceiling quantities, demand is, When the government imposes a price ceiling = $12, disequilibrium between quantity demanded and quantity supplied results in.

  Caluclating monopoly price and profit maximizing output

Suppose you are the manager of a firm that sells its product in a competitive market at a price of 50. Your firms cost structure is c=40 + 5Q2. The profit maximizing output for your company is;

  What analysis of effect on private saving might suggest

Each of the policies described above may lead to an increase in the long-run level of investment spending in the economy. Using a diagram of the aggregate production function, show that any such increase will lead to an increase in the future leve..

  The demand for chevrolets in the united states

What would be the effect of each of the following on the demand for Chevrolets in the United States? In each case, identify the responsible determinant of demand.a. The price of Fords plummets. b. Consumers believe that the price of Chevrolets will r..

  Determine the amounts petra will pay under arrangement

The second payment will be made twenty-seven months from today and will be twice the size of the first payment. The third payment will be 2.5 times the size of the first payment and will be made in 3.5 years. Determine the amounts Petra will pay u..

  Which theory might frame a research study into question

Do a brief secondary investigation of a question of interest to you related to organizational culture, individual differences, or perceptions, attributions, and emotions. For your secondary investigation, you will review at least three scholarly r..

  Find the equilibrium number of hours worked in this economy

Assume that Mf = Ma. Find the real wage that makes total labor supply and total labor demand exactly equal to each other (this is called, the equilibrium real wage). Find the equilibrium number of hours worked in this economy

  Define advantages and disadvantages of verbal description

At $300, a total of 10,000 ounces of output is profitable. Similarly, total production increases by 5000 ounces for each sucessive $100 increase in the price of gold. Describe the relevant relationship between the price of gold and the production ..

  Define the economics terms below for nbspnbspnbspnbspnbsp a

define the economics terms below for ..nbspnbspnbspnbspnbsp a nbspnational accounting identity.nbspnbspnbspnbspnbsp b

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd