This topic contains a solution. Click here to go to the answer

Author Question: How is a competitive firm's demand for labor derived when labor is the firm's only variablefactor of ... (Read 55 times)

arivle123

  • Hero Member
  • *****
  • Posts: 569
How is a competitive firm's demand for labor derived when labor is the firm's only variablefactor of production in the short run?
 
  What will be an ideal response?

Question 2

Caithness Energy, a firm that produces renewable energy, runs a wind farm in Ione, Oregon. The families that live close to this farm have complained to the county planning commission about the high noise levels from the wind turbines.
 
  Although the government regulates the amount of noise that is allowed in a town or a city, it is difficult to decide what the appropriate level should be and how it should be measured. Following the complaints, a Caithness representative offered households 5,000 if they agreed not to complain about the noise. Is this consistent with what the Coase theorem predicts would happen? Explain.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

milbourne11

  • Sr. Member
  • ****
  • Posts: 322
Answer to Question 1

When labor is the only variable input for a firm in the short run, the firm's demand for labor is the marginal revenue product of labor curve.

Answer to Question 2

Caithness Energy's marginal private costs of producing wind energy do not account for the noise pollution that it generates. The noise that is being produced by the wind farm is an example of a negative externality. In this context, the Coase theorem predicts that Caithness Energy and the families near the farm will negotiate and the end result will be efficient. The fact that a private deal was struck between the company and the families for 5,000 shows that an efficient outcome was achieved regardless of the law. This is consistent with the predictions of the Coase Theorem.
See http://www.nytimes.com/2010/08/01/us/01wind.html




arivle123

  • Member
  • Posts: 569
Reply 2 on: Jun 29, 2018
Excellent


aruss1303

  • Member
  • Posts: 314
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

Inotropic therapy does not have a role in the treatment of most heart failure patients. These drugs can make patients feel and function better but usually do not lengthen the predicted length of their lives.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

Most women experience menopause in their 50s. However, in 1994, an Italian woman gave birth to a baby boy when she was 61 years old.

For a complete list of videos, visit our video library