21. 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 TABLE D- The wage is $150 and the price of output (Q) is $20.
L Q
MP
L
MRP
Marginal Profit
Total Profit
0 0
-----
-----
-----------
0
1
8
10
$
200
$
50
$
50
2
20
14
$
280
$
130
$
180
3
28
10
$
200
$
50
$
230
4
35
9
$
180
$
30
$
260
5
41
8
$
160
$
10
$
270
6
45
6
$
120
$
-30
$
240
Table for Individual Question Feedback
Points Earned:
12.0/15.0

22. Use Scenario D/Table D to answer the questions 22 –24 below.(3 points) The profit maximizing output is
.
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Points Earned:
0.0/3.0

23.
(3 points) The profit maximizing level of labor input is
5
workers.
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Points Earned:
3.0/3.0
Correct Answer(s):
5
24.
(3 points) The maximum profit for this firm is
270
.
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Points Earned:
3.0/3.0
25. (3 points) Using Scenario D/Table D, go to Graph 1.Draw your new production function (remember technology [total factor productivity] increased, shifting the production function!) Label the new profit maximizing Q and L combination as point D. Point D should be along the new PF (PF') at point (5,51)
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Points Earned:
2.2/3.0
Correct Answer(s):