Please help me with the last three question d,e,f. Thank you. Consider a production function Y = KªL1-«.a) What is the marginal product of capital? Write down the formula and show your working.b) Write down the profit maximization problem for the firm. c) Use your previous answer to (a) and (b) to write down the labor demandcurve which relates the quantity of labor the firm demands to the price oflabor (i.e. the wage).d) If the quantity of labor supplied increases by 1%, what is the increase inthe firm's output? State your answer in terms of expenditure shares.e) If the quantity of labor supplied increases by 1%, what is the change inthe real wages of workers?f) If this production function is to represent the US economy, what is areasonable value to choose for a? Why?

Answer d) If the Quantity of Labour supplied Increased by 1% then, the firm's output shown as…

d) If the quantity of labor supplied increases by 1%, what is the increase in the firm's output? State your answer in terms of expenditure shares. e) If the quantity of labor supplied increases by 1%, what is the change in the real wages of workers? f) If this production function is to represent the US economy, what is a reasonable value to choose for a? Why?

d) If the quantity of labor supplied increases by 1%, what is the increase in the firm's output? State your answer in terms of expenditure shares. e) If the quantity of labor supplied increases by 1%, what is the change in the real wages of workers? f) If this production function is to represent the US economy, what is a reasonable value to choose for a? Why?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 17PAE

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