How each program would affect the daily budget constraint

Assignment Help Econometrics

Reference no: EM13201241

A firm produces output according to the production function Q=K^(1/2)L^(1/2). If it sells its output in a perfectly competitive market at a price of 10, and if K is fixed at 4 units, what is this firm's short-run demand curve for labor?

How would your answer to the preceding problem be different if the employer in question sold his product according to the demand schedule P = 20 - Q?

In his current job, Smith can work as many hours per day as he chooses, and he will be paid $1/hr for the first 8 hours he works, $2.50/hr for each hour over 8. Faced with this payment schedule, Smith chooses to work 12 hr/day. If Smith is offered a new job that pays $1.50/hr for as many hours as he chooses to work, will he take it? Explain.

Consider the following two antipoverty programs: (1) A payment of $10/day is to be given this year to each person who was classified as poor last year; and (2) each person classified as poor will be given a benefit equal to 20 percent of the wage income he earns each day this year. a. Assuming that poor persons have the options of working at $4/hr, show how each program would affect the daily budget constraint of a representative poor worker during the current year. b. Which program would be most likely to reduce the number of hours worked?

A monopsonist's demand curve for labor is given by w = 12 - 2L, where wis the hourly wage rate and L is the number of person-hours hired. a. If the monopsonist's supply (AFC) curve is given by w = 2L, which gives rise to a marginal factor cost curve of MFC = 4L, how many units of labor will he employ and what wage will he pay?b. How would your answers to part (a) be different if the monopsonist were confronted with a minimum wage bill requiring him to pay at least $7/hr? c. How would your answers to parts (a) and (b) be different if the employer in question were not a monopsonist but a perfect competitor in the market for labor?

Smith can produce with or without a filter on his smokestack. Production without a filter results in greater smoke damage to Jone. The relevant gains and losses are as follows: Gains to Smith: $200/wk with filter; $245/wk without filter. Damage to Jones: $35/wk with filter; $85/wk without filter. a. If Smith is not liable for smoke damage and there are no negotiation costs, will he install a filter? Explain carefully. b. How, if at all, would the outcome be different if Smith were liable for all smoke damage and the cost of the filter were $10/wk higher than indicated in the table? Explain carefully.

Reference no: EM13201241

Questions Cloud

Explain surplus if the wholesale market price : Determine the producers' surplus if the wholesale market price is set at $12/unit. (Round your answer to two decimal places.)

Calculate projects initial time cash flow : Calculate the projects initial time cash flow, taking into account all side effects and what the RDS project's internal rate of return (IRR) and net present value (NPV) are. What will you report

State the inequalities representing the baker''s possible : Set up the inequalities representing the baker's possible choices for baking the number of loaves of bread and muffins to use up his available resources (wheat and sugar).

Explain lotteries have both micro or macro economic effects : Do you think lotteries have both micro and macro economic effects or only micro. how do lotteries change what and for whom goods and services are produced.

How each program would affect the daily budget constraint : Smith can work as many hours per day as he chooses, and he will be paid $1/hr for the first 8 hours he works, $2.50/hr for each hour over 8. Faced with this payment schedule, Smith chooses to work 12 hr/day.

State the expression to calculate the area of the stones : The width of the border of stones is 2 feet longer than the width of the court. The length of the border is twice the width of the court. Determine the expression to calculate the area of the stones.

What can the stakeholders learn from specific situation : What can the stakeholders learn from specific situation and what have you learned from this case that you can apply immediately in your own career or life experience?

Explain a monopolist has a total cost : To produce x units of a particular commodity, a monopolist has a total cost of C(x) = 2x^2 + 3x + 5. The unit price at which the x units will be sold is p(x) = 5-2x.

Do the conditions differ from utility-maximizing conditions : such as making charitable contributions or civic expenditures (MU). Can you set up the problem and derive the optimization conditions if the owner-manager wishes to obtain a specific level of utility at the lowest possible cost.

User Account

All Pages