« previous next »

Author Question: Refer to Table 8-27. What is the level of personal income for this economy? A) 1,140 billion B) ... (Read 79 times)

ETearle

  • Hero Member
  • *****
  • Posts: 580
on: Jun 29, 2018
Refer to Table 8-27. What is the level of personal income for this economy?
 
  A) 1,140 billion B) 1,010 billion C) 990 billion D) 860 billion

Question 2

Alan's Roast House sells roasted peanuts in a competitive market. The firm employs labor ata wage rate of 6 per hour and rents capital for 15 per hour.
 
  At its current level of labor and capital, the marginal product of labor is 12 and the marginal product of capital is 40 . Is the firm currently maximizing profit? Explain.


Perkypinki

  • Sr. Member
  • ****
  • Posts: 339
Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

No, the firm is not currently maximizing profit. The firm should hire labor and capital such that MPL/PL is equal to MPK/PK. In this case, MPL/PL (2) is less than MPK/PK (2.67). Thus, the firm should hire less labor (which would raise MPL) and more capital (which would lower MPK).


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Did you know?

There are 60,000 miles of blood vessels in every adult human.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Select the Code with the Highest Level of Specificity Select the Code with the Highest Level of Specificity
Sources of income for U.S. population aged 65 and over. Sources of income for U.S. population aged 65 and over.
Many diesel fuel additives increase the cetane rating which results in improved fuel economy. Many diesel fuel additives increase the cetane rating which results in improved fuel economy.
Latin America in the Global Economy Latin America in the Global Economy
Personal Grooming and Rejuvenation Timeline Personal Grooming and Rejuvenation Timeline
table table
Video: Steps of glucose catabolism

For a complete list of videos, visit our video library