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{21]} Production Function and Labor Market a. The production function is giyll by: l" = 25K ""51. Your goal is to compute the marginal...

Screen Shot 2018-09-04 at 2.18.17 AM.png

The production function is given by:

Screen Shot 2018-09-04 at 2.18.17 AM.png

{21]} Production Function and Labor Market
a. The production function is giyll by: l" = 25K “"51.“5 . Your goal is to compute
the marginal product of labor [MPL] using Excel i. ii. {15) Let’s set K=l Hi}. You should be able to characterize Y as a function
of L now. [in an excel spreadsheet create 3 columns and label them: “L",
“Y", and “MP ". 1n the column labeled “L", put in values for L, e.g.,
integers ranging fiom 1 to lflfl. {So, you will have It!) rows]. Thll, in
the column labeled "Y", put in the solution for Y using the production
function. Finally, in the column labeled “MP " do the following computation: 371* where the numerator is the change in output in one row
from the preceding row, and the denominator is the change in labor in one row from the preceding row [which based in the example a few lines
above would be 1).
{5) Suppose the wage = 15. How many workers will the firm want to hire {based on your spreadsheet}? Explain

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