MGEC58H3 Study Guide - Final Guide: Demand Curve, Perfect Competition, W. M. Keck Observatory
Document Summary
Problem set 1 labour supply and labour demand. Suppose that there are three utility functions for consumption (c) and leisure (t): U(c,t) = 0. 2c0. 5 + t0. 5 (ii) (iii) u(c,t) = [25c-1 + t-1]-1. In each case, you have been given the equilibrium condition. In each case, begin by assuming that w = , and the consumer has 4000 hours at her disposal to use for leisure or work. Determine t, c and hours of work for all three cases. amount of labour it hires) and k (the amount of capital it buys): Suppose that a firm has the following production functions in terms of l (the (i) (ii) (iii) f(l,k) = 4l0. 5k0. 5 f(l,k) = 2l0. 5 + 2k0. 5 f(l,k) = 3l2/3 + 2k1/3. Determine the profit-maximizing number of workers each of these firms will hire, Suppose that the firm is in the short run, and has chosen to buy 64 units of capital.