1. The production technology of a firm is given by the following equation: = 15.5.5 Assume K...

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1. The production technology of a firm is given by the following equation: = 15.5.5 Assume K initially equals 25 a. Fill in the first blank column below, showing what the output is per different number of workers. Round the nearest two decimal places. Number of workers Units of output MPN MRPN (P=6) 0 1 2 3 4 5 6 7

b. Define the marginal product of labor and explain how it relates to the production function (with N on horizontal axis and Y on vertical axis).

c. Assume that the price of a unit of output is $6. Find the marginal product of labor (MPN) and the marginal revenue product of labor for each level of employment (fill in the third column of table above).

d. Calculate the number of workers that will be hired if the nominal wage rate = $140. Calculate the number of workers the firm will hire if the nominal wage is $110. Calculate the number of workers that the firm will hire if the nominal wage is $90. Please show your work. If W = $140, N = If W = $110, N = If W = $90, N =

e. Why exactly does the firm's behavior change when the nominal wage fall like it did, all else constant? In particular, explain exactly why the firm changes their labor input when nominal wages fall from $140 to $110, all else constant. Make sure you refer to the profit maximizing condition when answering this question.

Assume that an event makes the new production function equal to: = 20.5.5 f. Fill in the table below. Number of workers Units of output MPN 0 0 1 2 3 4 5 6 7

g. List and explain two real life examples of events that could cause this change to the production function.