Econ 339 Fall 2009 Problem Set 3_1

Econ 339 Fall 2009 Problem Set 3_1 - Econ 339 Fall Quarter...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 339 Fall Quarter 2009 Problem Set 3 - Due Date: 10/19/2009 Solve the following Problems. Show your work. 1. Problems: 3-1, 3-4, 3-7, 2. Problems: 4-6 3. (a) What happens to the long-run demand curve for labor if the demand for the firm’s output increases? (b) What happens to the long-run demand curve for labor if the price of capital increases? 4. Suppose the labor supply curve is upward sloping and the labor demand curve is downward sloping. The study of economic trends over a particular time period reveals that the wage recently fell while employment levels rose. Which curve must have shifted and in which direction to produce this effect? 5. Chicken Hut faces perfectly elastic demand for chicken dinners at a price of $6 per dinner. The Hut also faces an upward sloped labor supply curve of E = 20w – 120, where E is the number of workers hired each hour and w is the hourly wage rate. Thus, the Hut faces an upward sloped marginal cost of labor curve of MC E = 6 + 0.1E . Each hour of labor produces 5 dinners. (The cost of each chicken is $0 as the Hut
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/17/2009 for the course ECON 339 taught by Professor Habermalz during the Spring '09 term at Northwestern.

Page1 / 3

Econ 339 Fall 2009 Problem Set 3_1 - Econ 339 Fall Quarter...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online