Homework 3 part 3 - 20(2 points When comparing Scenario A to Scenario C the firm now earns profit A more B less Feedback note that the firm changes its

Homework 3 part 3 - 20(2 points When comparing Scenario A...

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20.(2 points) When comparing Scenario A to Scenario C, the firm now earns _______ profit.A) moreB) lessFeedback: note that the firm changes its behavior due to the lowered wage. The firm hires more workers and makes more output in order to maximize profit. Remember that profit maximization requires that workers be hired up to the point where W=MRP. Consider the situation if the firm stayed with only 3 workers. Once the wage falls to 130, at 3 workers the wage is 130 and the MRP is 160. So at 3 workers, WMRP for the 5th worker.Table for Individual Question FeedbackPoints Earned:2.0/2.0Correct Answer(s):A21.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 MPLof 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
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  • Fall '10
  • staff
  • Macroeconomics, Correct Answer, Individual Question

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