Consider an economy with the following Cobb–Douglas production function: = k1⁄3L2⁄3.
The economy has 1,000 units of capital and a labor force of 1,000 workers.
a. Derive the equation describing labor demand in this economy as a function of the real
wage and the capital stock.
b. If the real wage can adjust to equilibrate labor supply and labor demand, what is the real
wage? In this equilibrium, what are employment, output, and the total amount earned
by workers?
c. Now suppose that Congress, concerned about the welfare of the working class, passes a
law requiring firms to pay workers a real wage of one unit of output. How does this
wage compare to the equilibrium wage?
d. Congress cannot dictate how many workers firms hire at the mandated wage. Given this
fact, what are the effects of this law? Specifically, what happens to employment, output,
and the total amount earned by workers?
e. Will Congress succeed in its goal of helping the working class? Explain.
f. Do you think that this analysis provides a good way of thinking about a minimum wage
law? Why or why not?
Answers: 1
Business, 22.06.2019 12:50, axelsanchez7710
You are working on a bid to build two city parks a year for the next three years. this project requires the purchase of $249,000 of equipment that will be depreciated using straight-line depreciation to a zero book value over the three-year project life. ignore bonus depreciation. the equipment can be sold at the end of the project for $115,000. you will also need $18.000 in net working capital for the duration of the project. the fixed costs will be $37000 a year and the variable costs will be $148,000 per park. your required rate of return is 14 percent and your tax rate is 21 percent. what is the minimal amount you should bid per park? (round your answer to the nearest $100) (a) $214,300 (b) $214,100 (c) $212,500 (d) $208,200 (e) $208,400
Answers: 3
Business, 22.06.2019 23:10, erykaa
Mbo works by objectives moving through the organization; that is, top managers set general organizational objectives, which are translated into divisional objectives, which are translated into departmental objectives. the hierarchy ends in individual objectives set by each employee. this is an example of mbo working as objectives through the organization.
Answers: 1
Business, 23.06.2019 00:30, HottheadAnthony7234
Shelly bought a house five years ago for $150,000 and obtained an 80% loan. now the home is worth $140,000 and her loan balance has been reduced by $12,000. what is shelly's current equity?
Answers: 3
Business, 23.06.2019 02:10, yaniravivas79
Which of the following most accurately describes how the equilibrium price of a good or service can be determined? a. by moving the supply curve right or left until it matches the demand curve. b. by finding where the supply curve and the demand curve intersect. c. by doing market research to determine the maximum price consumers will pay. d. by taking the opposite of the columns in a supply schedule and a demand schedule.
Answers: 2
Consider an economy with the following Cobb–Douglas production function: = k1⁄3L2⁄3.
The economy ha...
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