7 - ECO 4616 In-Class Exercises Prof Francisca Antman...

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ECOglyph1197 4616 In-Class Exercises glyph1197AME: Prof. Francisca Antman Exercise 7—Labor Demand (Borjas 4-10) Suppose the hourly wage is $10 and the price of each unit of capital is $25. The price of output is constant at $50 per unit. The production function is
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Unformatted text preview: f(E,K) = E ½ K ½ , If the current capital stock is fixed at 1,600 units, how much labor should the firm employ in the short run? (Hint: First find the MP E .) How much profit will the firm earn?...
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  • Fall '08
  • ANTMAN
  • Economics, $10, $50, $25, Prof. Francisca Antman

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