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Suppose you are the production manager for Widgets, Inc. Your job is to produce a fixed amount of output at the lowest cost possible. When you take over the position, you find that the price paid for a unit of labor is $20 (W = $20), and the price paid for a unit of capital is $50 (R = $50). You also discover that with the current mix of capital (K) and labor (L), the marginal product of labor is 10 (MPL = 10) and the marginal product of capital is 20 (MPK = 20). Is your company minimizing cost? If not, how could you change inputs to do so? Use a diagram to help explain your answer.
Suppose a firm raises $23 million dollars by issuing debt at a cost of 6.1%, raises $14 million by issuing common stock at a cost of 8.6% and raises an additional $10 million by is
Q. Explain about Labor Market in AS-AD model? In AS-AD model, economy will always be on the response curve - the thick line in chart below. Figure: The labor in the
Calculating interest rates on a yearly basis If maturity is different from one year, interest rate is generally recalculated to a corresponding one year rate. For instance con
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Sara runs a small business assembling personal computers. This table shows her total cost at different levels of output. Number of computers produced
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What is income generation process
Augmented Saving An alternative way of determining equilibrium GDP is to find the level of income where the sum of desired injections equals the sum of desired leakages. Desi
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