MiniExam2Essay_Key

# MiniExam2Essay_Key - Mini Exam 2 Name Section Recitation...

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Mini Exam 2 Name: _________________________________ Section: ________ Recitation Leader: __________________ 1. The production technology of a firm is given in the table below. Number of workers Units of output MPN 0 0 1 20 20 2 36 16 3 48 12 4 56 8 5 60 4 6 60 0 a. Find (on the table) the marginal product of labor (MPN) for each level of employment. b. Assume that the price of a unit of output is \$10. Calculate the number of workers that will be hired if the nominal wage rate = \$130. Calculate the number of workers the firm will hire if the nominal wage is \$210. Calculate the number of workers that the firm will hire if the nominal wage is \$50. If P=\$10 and W=\$130, w=13, so N=2. If P=\$10 and W=\$210, w=21, so N=0. If P=\$10 and W=\$50, w=5, so N=4. c. Graph the labor demand curve of the firm. /6 /3 /4 w N 20 16 12 8 4 1 2 3 4 5 6

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2. Suppose that an economy’s aggregate production function is given by Y = 2 · A · N – ½N 2 . The marginal product of labor for this production function is MPN = 2 · A – N.
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MiniExam2Essay_Key - Mini Exam 2 Name Section Recitation...

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