« 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 52 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?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

The term pharmacology is derived from the Greek words pharmakon("claim, medicine, poison, or remedy") and logos ("study").

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Worldwide Variations in Population and Income Levels Developed countries represent only 18% of the Worldwide Variations in Population and Income Levels Developed countries represent only 18% of the
Table 6.1 illustrates the main regime types and their differences. It breaks the regimes into four Table 6.1 illustrates the main regime types and their differences. It breaks the regimes into four
Saving Rates by Income Quintile, 2003 Saving Rates by Income Quintile, 2003
Rising Sea Level Rising Sea Level
World Mean Sea-Level Temperatures in January World Mean Sea-Level Temperatures in January
Sea-Level Pressure Sea-Level Pressure
Video: Attention Deficit Disorder (ADD)

For a complete list of videos, visit our video library