MGEC58H3 Study Guide - Final Guide: Demand Curve, Perfect Competition, W. M. Keck Observatory

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greygoat862

13 Dec 2018

School

UTSC

Department

Economics for Management Studies

Course

MGEC58H3

Professor

Harry Krashinsky

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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.

Related Questions

11. In your later studies in economics, you will Supply Curve of Labour learn that supply curves for labour can be "backward bending" (that is, can be negatively sloped if a rise in the wage rate leads workers to want to work less in order to take more vacations and more leisure time). Such a supply curve is represented at the right, where w is the wage rate per hour and L is the number of hours of labour. The demand curve for labour (representing the number of hours of labour demanded by firms which hire these workers) can be assumed to be downward sloping, as usual in this course. Which of the following statements about the stability of this situation is (are) generally true? 1) This labour market will be stable if the demand curve is flatter than the supply curve. In This labour market is inherently unstable. III) This labour market will be stable if a rise in wages Icads to excess supply of hours of work. A) only! B) only II C) only III DI & II (E) & III F) II & III G) I, II & III ) none of the three L

We develop deep insight into the individual's psyche and find that her utility function has the following form: U (C, L)= (C-200)*(L-80). Implying a marginal utility of consumption MU_C=(L-80) and a marginal utility of leisure of MU_L=(C-200). Assume that she receives no gifts from family or friends (V=0). Assume further that there are 168 hours in the week (T=168) and that her market wage rate is a lowly $5 an hour. How many hours would the person choose to work?

blushskunk17

Consider a firm whose technology is given by the production function: y = f (K,L) = (N+1)L + 2√K. Assume that input prices for labour, L, and capital, K, are w = 1 and r = 2 respectively. a)Find the firm’s short run total cost function assuming the firm cannot hire more workers nor fire its only worker, i.e. L = 1 is fixed.

b)Find the firm’s short run marginal cost, average variable cost and average fixed cost. Draw the three of them in the same graph. What is the short-run supply of the firm?

c)Find the firm’s long run total cost function, i.e. when all factors are variable.

d)Find the firm’s long run marginal cost and average cost. Draw them in the same graph. What is the long-run supply of the firm?

coralpug822

MGEC58H3 Study Guide - Final Guide: Demand Curve, Perfect Competition, W. M. Keck Observatory

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