In cast away islands there is only one company

Assignment Help Microeconomics
Reference no: EM13375776

In "Cast Away Islands", there is only one company, "Allelectronics", which produces TV. It is the sole employer of engineers in "Cast Away Islands". The labor supply curve of engineers is w=30+L and the production function for making TV is Q=8L. Due to the free trade policy of Cast Away Islands, TV market is perfectly competitive and Allelectronics takes the TV price as given at P=5.

(a) How many worker "Allelectronics" hire? What is the wage rate? How many TVs does Allelectronics produce?

It was recently found out that Cast Away Islands was building a nuclear weapon secretly. As a result WTO imposed severe economic sanctions. There is no more free trade and Allelctronics now has a monopoly power in domestic TV market. The domestic demand for TV is P= (57/2 - 1/2Q).

(b) How many worker "Allelectronics" hire? What is the wage rate? How many TVs does Allelectronics produce? What is the price for TV?

(c) Graph the labor market with L on x-axis, w on y-axis. Draw labor supply curve, marginal expenditure function, labor demand curve. You can assume that w= ∂TR(L)/∂L is the labor demand function. To get ∂TR(L)/ ∂L, first write down the total revenue function only in terms of L (use the production function to substitute Q), then differentiate it with respect to L.

(d) What is the welfare loss in the labor market compared to the case where the engineer labor market is competitive?

Reference no: EM13375776

Questions Cloud

Because of the economic sanctions cast away islands cannot : because of the economic sanctions cast away islands cannot import hollywood movies or dvds. eunyoung is a super genius
The market for social games on facebook is perfectly : the market for social games on facebook is perfectly competitive. the demand curve for games published is given by
Yumi is a lawyer specialized in mampa when she takes a case : yumi is a lawyer specialized in mampa. when she takes a case she receives 1000 as a basic payment. if she manages to
Chens car is worth 5000 but she is sometimes careless and : chens car is worth 5000. but she is sometimes careless and leaves the door open and the keys in the ignition.
In cast away islands there is only one company : in cast away islands there is only one company allelectronics which produces tv. it is the sole employer of engineers
Consider the market for smart-phones with two dominant : consider the market for smart-phones with two dominant players applea iphone4s and samsungs galaxy. these smart phones
Febreze f and glade g are two brands of air freshener : febreze f and glade g are two brands of air freshener. consumers consider the product a homogeneous good but the market
Consider the graph belownbsp it contains 2 separate demand : consider the graph below.nbsp it contains 2 separate demand curves d1 and d2 the marginal revenue curve associated with
A complete the table above you do not have to complete any : a. complete the table above. you do not have to complete any cell with - in it. be careful calculating mc and mr note

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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