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Get college assignment help at uniessay writers A competitive firm has a production function described as follows. “Weekly output is the square root of the minimum of the number of units of capital and the number of units of labor employed per week.” Suppose that in the short run this firm must use 16 units of capital but can vary its amount of labor freely.

Problem Set 3 (due in class October 29, 2010) 1. Ymir Larson farms near Niffleheim, Minnesota. He works 80 hours a week. He can either grow rutabagas or raise pigs. Every hour that he spends growing rutabagas gives him $2 of income this year. Every hour that he spends raising pigs this year will add $4 to his income next year. In fact, next year’s weekly income will be 100 4H dollars where H is the number of hours he spends raising pigs this year. Ymir’s utility function is U(c1, c2) = min{c1, c2}, where c1 and c2 are his consumption expenditures this year and next year. Ymir doesn’t believe in banks and will neither lend money nor borrow money. a. Draw Ymir’s budget line for current and future consumption, labeling key points on it. b. How many hours a week will he choose to spend raising pigs? c. How much money will he spend per week on consumption in each year? 2. Clancy has $1,200. He plans to bet on a boxing match between Sullivan and Flanagan. For $4, he can buy a coupon that pays $10 if Sullivan wins and nothing otherwise. For $6 he can buy a coupon that will pay $10 if Flanagan wins and nothing otherwise. Clancy doesn’t agree with these odds. He thinks that the two fighters each have a probability of of winning. If he is an expected utility maximizer who tries to maximize the expected value of lnW, where lnW is the natural log of his wealth, howmany coupons would it be rational for him to buy? 3. For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant. Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions. a. Q = K L. b. Q = K0.5L0.5. c. Q = min(K, L). 4. A competitive firm has a production function described as follows. “Weekly output is the square root of the minimum of the number of units of capital and the number of units of labor employed per week.” Suppose that in the short run this firm must use 16 units of capital but can vary its amount of labor freely. a. Write down a formula that describes the marginal product of labor in the short run as a function of the amount of labor used. (Be careful at the boundaries.) b. If the wage is w = $1 and the price of output is p = $4, how much labor will the firm demand in the short run? c. What if w = $1 and p = $10? d. Write down an equation for the firm’s short-run demand for labor as a function of w and p. 5. The cost function c(w1, w2, y) of a firm gives the cost of producing y units of output when the wage of factor 1 is w1 and the wage of factor 2 is w2. Find the cost functions for the following firms: a. A firm with production function f (x1, x2) =min{2×1, 3×2} b. A firm with production function f (x1, x2) = 2×1 3×2 c. A firm with production function f (x1, x2) =max{2×1, 3×2}

1. Ymir Larson farms near Niffleheim, Minnesota. He works 80 hours a week. He can either grow rutabagas or raise pigs. Every hour that he spends growing rutabagas gives him $2 of income this year. Every hour that he spends raising pigs this year will add $4 to his income next year. In fact, next year’s weekly income will be 100 4H dollars where H is the number of hours he spends raising pigs this year. Ymir’s utility function is U(c1, c2) = min{c1, c2}, where c1 and c2 are his consumption expenditures this year and next year. Ymir doesn’t believe in banks and will neither lend money nor borrow money. a. Draw Ymir’s budget line for current and future consumption, labeling key points on it. b. How many hours a week will he choose to spend raising pigs? c. How much money will he spend per week on consumption in each year? 2. Clancy has $1,200. He plans to bet on a boxing match between Sullivan and Flanagan. For $4, he can buy a coupon that pays $10 if Sullivan wins and nothing otherwise. For $6 he can buy a coupon that will pay $10 if Flanagan wins and nothing otherwise. Clancy doesn’t agree with these odds. He thinks that the two fighters each have a probability of of winning. If he is an expected utility maximizer who tries to maximize the expected value of lnW, where lnW is the natural log of his wealth, howmany coupons would it be rational for him to buy? 3. For each of the following production functions, draw a diagram showing the general shape of its corresponding isoquant. Comment on the ease at which labor and capital can be substituted for one another relative to the other two production functions. a. Q = K L. b. Q = K0.5L0.5. c. Q = min(K, L). 4. A competitive firm has a production function described as follows. “Weekly output is the square root of the minimum of the number of units of capital and the number of units of labor employed per week.” Suppose that in the short run this firm must use 16 units of capital but can vary its amount of labor freely. a. Write down a formula that describes the marginal product of labor in the short run as a function of the amount of labor used. (Be careful at the boundaries.) b. If the wage is w = $1 and the price of output is p = $4, how much labor will the firm demand in the short run? c. What if w = $1 and p = $10? d. Write down an equation for the firm’s short-run demand for labor as a function of w and p. 5. The cost function c(w1, w2, y) of a firm gives the cost of producing y units of output when the wage of factor 1 is w1 and the wage of factor 2 is w2. Find the cost functions for the following firms: a. A firm with production function f (x1, x2) =min{2×1, 3×2} b. A firm with production function f (x1, x2) = 2×1 3×2 c. A firm with production function f (x1, x2) =max{2×1, 3×2}

At a management luncheon, two managers wre overheard arguing about the following statement, ” a manager should never hire another worker if the new person causes diminishing returns.”

1. Opponents of globalization argue that offshoring leads to a loss of jobs in the country that transfers jobs to lower-wage countries. Evaluate all aspects of this argument.

2. Supporters of globalization argue that offshoring benefits a country’s economy. Evaluate.

If the store currently charges a price of $75, then increased that price to $90, what happens to total revenue from shoe sales (calculate P X Q before and after the price change)? Repeat the exercise assuming the initial price is increased from $45 tp $60. From $15 to $30

Assume Hong Kong is labor abundant and Japan is capital abundant. Assume production of clothing is labor intensive and production of automobiles is capital intensive. Sketch the production possibilities curves for Hong Kong and Japan (assume opportunity costs are increasing).

Government’s economic role is complicated by the fact that:

A firm currently uses 300 labor hours and 200 machine hours to produce 200 gizmos per month. The price of labor is $10 and the rental rate on machines is currently $15 per hour. The technical rate of technical substitution of capital for labor declines as capital is substituted for labor. Draw the firm’s isoquant and isocost lines and show its current equilibrium in the use of labor and machines when producing 200 gizmos per month.

Get college assignment help at uniessay writers Update the data in the left column of the text’s 7.3, using the latest available quarterly data. Search the full list of NIPA tables to find the latest reported data for national income (NI), personal income (PI), and disposable income (DI). Update the data in the text’s Table 7.4 for these three items. By what percentages are GDP, NI, PI and DI higher (or lower) than the numbers in the table.

If the world attained a perfect Heckscher-Ohlin model equilibrium with trade, then (a) workers in the labor abundant country would migrate to the capital abundant country. (b) workers in the labor abundant country would wish to migrate to the capital abundant country. (c) workers in the labor abundant country would have no desire to migrate to the capital abundant country. (d) workers in the capital abundant country would wish to migrate to the labor abundant country. (e) workers in the capital abundant country would migrate to the labor abundant country. 2. The home location of most of the world’s large multinational companies is (a) North America and Europe. (b) North America and Asia. (c) Europe and South America. (d) Europe and Asia. (e) None of the above. 3. Which of the following best refers to the outright construction or purchase abroad of productive facilities by domestic residents? (a) Foreign direct investment (b) Portfolio Investment (c) Short-term capital investment. (d) Long-term capital investment (e) None of the above. 4. Trade analysis involving multinational corporations differs from our conventional trade analysis because multinational corporation analysis involves (a) absolute cost differentials rather than comparative cost differentials. (b) the international movement of factor inputs as well as that of finished goods. (c) purely competitive markets rather than imperfectly competitive markets. (d) portfolio investments rather than direct foreign investment. (e) None of the above. 5. Multinational corporations (a) increase the transfer of technology between nations. (b) make it harder for nations to foster activities of comparative advantage. (c) always enjoy political harmony in host countries in which their subsidiaries operate. (d) require governmental subsidies in order to conduct worldwide operations. (e) None of the above. 6. American labor unions have recently maintained that U.S. multinational corporations have been (a) exporting American jobs by investing overseas. (b) exporting American jobs by keeping investment in the United States. (c) importing cheap foreign labor by shifting U.S. investment overseas. (d) importing cheap foreign workers by keeping U.S. investment at home. (e) None of the above. 7. International labor mobility (a) leads to wage convergence by raising wages in the destination country and lowering wages in the source country. (b) is in accordance with the specific factors model (c) is in accordance with the Heckscher-Ohlin factor proportions model. (d) leads to wage convergence by raising wages in source and lowering them in destination country. (e) is in accordance with scale economy model. 8. The shift of labor-intensive assembly operations from the United States to Mexican maqiladora may be best explained in terms of a theory of (a) location. (b) vertical integration. (c) horizontal integration. (d) internalization. (e) None of the above. 9. In a typical short-run production function, as labor increases (a) the marginal product of capital decreases. (b) the overall product of labor decreases. (c) the average product of labor decreases. (d) the marginal product of labor decreases. (e) None of the above.

8.38 Quality Progress, February 2005, reports on the results achieved by Bank of America in improving customer satisfaction and customer loyalty by listening to the “voice of the customer.” A key measure of customer satisfaction is the response on a scale from 1 to 10 to the question: “Considering all the business you do with Bank of America, what is your overall satisfaction with Bank of America?”2 Sup- pose that a random sample of 350 current customers’ results in 195 customers with a response of 9 or 10 representing “customer delight.” Find a 95 percent confidence interval for the true proportion of all current Bank of America customers who would respond with a 9 or 10. Are we 95 percent confident that this proportion exceeds .48, the historical proportion of customer delight for Bank of America?

1) The advent of DVDs has virtually demolished the market for videocassettes. This is an example of: A. capital accumulation. B. creative destruction. C. derived demand. D. the difference between normal and economic profits

7.22 In the July 29, 2001, issue of The Journal News (Hamilton, Ohio) Lynn Elber of the Associated Press reported on a study conducted by the Kaiser Family Foundation regarding parents’ use of television set V-chips for controlling their children’s TV viewing. The study asked parents who own TVs equipped with V-chips whether they use the devices to block programs with objectionable content. A) Suppose that we wish to use the study results to justify the claim that fewer than 20 percent of parents who own TV sets with V-chips use the devices. The study actually found that 17 percent of the parents polled used their V-chips.2 If the poll surveyed 1,000 parents, and if for the sake of argument we assume that 20 percent of parents who own V-chips actually use the devices (that is, p = .2), calculate the probability of observing a sample proportion of .17 or less. That is, calculate P (pˆ ≤ .17). b) Based on the probability you computed in part a, would you conclude that fewer than 20 per- cent of parents who own TV sets equipped with V-chips actually use the devices? Explain.

7. Suppose that the percentage returns for a given year for all stocks listed on the New York Stock Exchange are approximately normally distributed with a mean of 12.4 percent and a standard deviation of 20.6 percent. Consider drawing a random sample of n =5 stocks from the population of all stocks and calculating the mean return, x, of the sampled stocks. Find the mean and the standard deviation of the sampling distribution of x, and find an interval containing 95.44 percent of all possible sample mean returns

Categories or specific goods or services to be compared

Do you think the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon affected short- and/or long term productivity in the United States? Explain your response and show any movement in the PPF.

A. Assuming a wholesale price $5 per case, calculate the breackeven output quantities for each alternative

if japan’s annual money supply rate fell in 1900’s- 2000’s tp 1-2% from an annual of 10-11% in 1980”s what effects would this have on Japanease real out put, unemployment, and inflation?

Which of the following combinations of indicators would be most consistent with a booming economy that is approaching full employment? A. high consumer confidence, high unemployment, rising rates of inflation. B. High consumer confidence, high unemployment, low inflation. C. High consumer confidence,low unemployment, rising rates of inflation. D. Low consumer confidence, low unemployment, low inflation

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November 3, 2019