1. Fill in Table B – Each box is worth ½ point for a total of 9 points for Table B
2. Use Scenario B/Table B to answer the questions 2 – 4 below.
(3 points) The profit maximizing output (Q) is
3. The profit maximizing level of labor (L) input is
4. The maximum profit for this firm is
5. DOWNLOAD AND PRINT GRAPHING TEMPLATE (available in the homework 3 instructions). This template already shows the outcome from scenario A. You will be adding results from scenario B to these graphs.
(2 points) Using Scenario B/Table B, go to Graph 1. Label the new profit maximizing Q and L combination on the production function as point B.
6. Using Scenario B/Table B, go to Graph 2 and draw this firm’s new MRP curve (remember that MRP = P* MPL, and since price changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter B.
7. Using Scenario B/Table B, draw this firm’s Supply curve on Graph 3. You should construct a supply curve as we did in lecture with point A representing the original price and output combination from scenario A (original price was $20 combined with the profit maximizing Q of 28) and point B representing the price and output combination after the change in economic conditions in Scenario B (price rose to $22, and the profit maximizing Q you found in your answer for #2 above). Connect the two points and label your supply curve.
8. When comparing Scenario A to Scenario B, the firm now hires _______ workers.
9. When comparing Scenario A to Scenario B, the firm now produces _____ output.
10. When comparing Scenario A to Scenario B, the firm now earns _______ profit.
11. SCENARIO C – We return to the original conditions (from scenario A) and now we let wages change. In particular, an increase in labor supply lowers the wage that the firm needs to pay to $130.
For question 11. Fill in Table C – Each box is worth ½ point for a total of 6 points for Table C
TABLE C- The wage has changed to $130 but the price of output (Q) is back at its original value of $20.
12. Use Scenario C/Table C to answer the questions 12 – 14 below.
(3 points) The profit maximizing output is
13. The profit maximizing level of labor input is
14. The maximum profit for this firm is
15. Using Scenario C/Table C, go to Graph 1. Label the profit maximizing Q and L combination as point C
16. Using Scenario C/Table C, go to Graph 4 and draw in this firm’s new wage line. The MRP curve is unchanged since MRP = P* MPL, and neither P nor MPL has changed. Shade in the new area for profit. Also label the profit maximizing point as letter C.
17. Using Scenario C/Table C, go to graph 3 and add this firm’s new supply curve (remember that wages fell, so output supply increases). Label as point C the price and output combination occurring after the change in economic conditions in Scenario C (P= $20, and the profit maximizing Q you found in your answer for #12 above). You only have one point on this supply curve, but you can sketch it as an upward sloping supply curve that is parallel to the supply curve you drew earlier.
18. When comparing Scenario A to Scenario C, the firm now hires _______
19. When comparing Scenario A to Scenario C, the firm now produces _____
20. When comparing Scenario A to Scenario C, the firm now earns _______ profit.
21. SCENARIO D – In this final scenario, we again return to our original conditions (from scenario A) and consider a positive productivity shock, just like we did in the lectures. In particular, let the MPL of each worker rise by two, due to an increase in total factor productivity (denoted A in the lecture), relative to the initial conditions.
For question 21, fill in Table D. Each box is worth ½ point for a total of 15 points for Table D
22. Use Scenario D/Table D to answer the questions 22 – 24 below.
(3 points) The profit maximizing output is
23. The profit maximizing level of labor input is
24. The maximum profit for this firm is
25. Using Scenario D/Table D, go to Graph 1. Draw your new production function (remember technology [total factor productivity] increased, shifting the production function!) Label the new profit maximizing Q and L combination as point D.
26. Using Scenario D/Table D, go to Graph 5 and draw this firm’s new MRP curve (remember that MRP = P* MPL, and since MPL has changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter D.
27. Using Scenario D/Table D, go to Graph 3 and add this firm’s new supply curve (a positive productivity shock increases supply!). Label the price and output combination after the change in economic conditions in Scenario D (P= $20, and the profit maximizing Q you found in your answer for #22 above). You only have one point on this supply curve, but you can sketch it as an upward sloping supply curve that is parallel to the supply curves you drew earlier.
28. When comparing Scenario A to Scenario D, the firm now hires _______ workers.
29. When comparing Scenario A to Scenario D, the firm now produces _____ output.
30. When comparing Scenario A to Scenario D, the firm now earns _______ profit.
BUY MORE MATERIALS FOR THIS COURSE:
ECON 104 Homework 1 Answer (Penn State University)
ECON 104 Homework 2 Answer (Penn State University)
ECON 104 Homework 3 Answer (Penn State University)
ECON 104 Homework 4 Answer (Penn State University)
ECON 104 Homework 5 Answer (Penn State University)
ECON 104 Homework 6 Answer (Penn State University)
ECON 104 Homework 7 Answer (Penn State University)
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Our Services
Custom Writings Help is a Quality-Oriented Company in Online Writing as a result of hiring exceptional professionals to execute clients' tasks.
Essays
At Custom Writings Help,We understand the struggle of research paper writing, and that is why at Custom WritingS Help, we are all out to help you. We pride ourselves on having a team of clinical writers. The stringent and rigorous vetting process ensures that only the 'BEST' Writers are chosen for the job. We have highly qualified Ph.D. and MA writers working with us; we equally offer these experienced writers specific bonuses and incentives to make them deliver highly original, unique, and informative content at reasonably low prices.
Admissions
Thesis Writing Service
Worlwide, Many Masters Students are struggling with Thesis Completion. A thesis is likely to be the longest and most challenging piece of work a student has ever completed. However, unlike essays and other assignments, a student can pick a particular interest topic and work on their initiative. Fortunately, we are there for you. At Custom Writings Help, you are assured of an authentic, imaginative, informative, linguistically great, and advantageous thesis that adheres to all your needs. So, why continue considering different writers when you have discovered the best in the field?
Editing
Custom Papers
Not a single student can avoid writing custom papers. However, a total lack of experience, skills, and time makes it very hard to produce a superb writing piece. Therefore, if you are seeking professional help, turn to us. Our specialized and experienced writers compose a variety of model papers, including custom essays, college term papers, research papers, book reports, MBA essays, executive summaries, dissertations, Ph.D. theses, admission essays, and research proposals for college and university students at any level.
Coursework
Essay Writing
Most of the students disregard the critical principles of essay writing and compose papers below sensible guidelines. Therefore, with Custom Writings Help, one should not worry about his/her essay. Our Writers compose informative and engaging content on all complexities and topics. We write meaningful and smart essays while prioritizing all aspects that bring about a good grade, such as impeccable grammar, proper structure, zero-plagiarism, and conformance to guidelines.
Coursework
Coourse Work Writing
Don't let the seemingly never-ending onslaught of writing assignments get you down. If you are looking where to get course work assistance online, the writers at Custom Writings Help are here to assist you with all of your writing needs. We undertake to unique delivery of papers that meet the professor's requirements. The content is proofread, edited, and checked plagiarism before submission to customers. No matter how big or small your work is, we will deliver on time. Try US Now! !
Coursework
Dissertation Writing Service
High-Quality Dissertation Writing Services are rare. They require Ph.D. academicians – not easily found. However, are an exception. The years, time, and resources we have invested in the dissertation world has given us a competitive advantage over others. Choose to come to Custom Writings Help; You will find perfect Ph.D. consultants who have written hundreds of dissertations theses ready to help you. Let our dissertation-writing services help you craft your dissertation, for you are assured we will give you the results.