Name BRITTANY YOUKERS OSIECKI last 4 PSU ID 4833 ECON 104 HOMEWORK #5 (100 points total) Instructions: Please show all work or points will be taken off. Good luck! 1.Initial Conditions (25 points total) Consider a firm that has the following relationship between labor and output, i.e., a production function. Along this production function, we hold land, capital (K) and technology (total factor productivity) fixed. Fill in the following table (5 points).TABLE 1LQMPLMRPMarginal ProfitTotal Profit00---0188$160$10$1022012$240$90$1003288$160$10$1104357$140-$10$1005416$120-$30$706454$80-$700The current wage is $150 and the price of output (Q) = $20.1a.(5 points for i through iv)i.The profit maximizing output is 28ii.The profit maximizing level of labor input is 3workers.iii.The maximum profit for this firm is $110iv.What is the marginal revenue product of the 6thworker? 0 b.(10 points for correct and completely labeled diagram with points A, B, C, D) Draw the production function associated with the table above.
labor (L) is the variable on the horizontal axis and output (Q) is the variable on the vertical axis and locate this initial point as point A.SEE PRODUCTION FUNCTION GRAPHc.(5 points) Now draw the W / MRP labor market diagram (associated with Table 1 above) as we did in lecture being sure to be clear on the areas that represent labor costs, MRP, and the marginal profit or loss – use the "smoothed out version" rather than the barchart version (use different colors if at all possible). You will need to draw a total of three of these 'initial conditions W / MRP labor market' diagrams (point A). SEE W-MRP-L GRAPH 1Be sure to watch the Homework 5 Explanation video in the Homework 5 folder in ANGEL for some guidance on the rest of the Homework Assignment.We are now going to consider 3 different scenarios.
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- Summer '17