Question: J. Suppose Caroline develops a new and much more efficient production process, so her firm's total factor productivity increases to 2 = 128. All else

J. Suppose Caroline develops a new and much more efficient production process, so her firm's total factor productivity increases to 2 = 128. All else remains as in #2 above. (a) (1 point) Solve the firm's problem to obtain the optimal labor choice, N-. (b) (1 point) How many cookies (total output )) does Caroline produce? (c) (1 point) How much profit (@) does Caroline earn? (d) (4 points) Explain why Caroline changed her optimal choice for N' compared to #2. How did the change affect the firm's output and profit? What would have been output and profit if the firm had maintained the same N* you found in #2? 4. Now suppose that the market wage rate increases to w = 32. All else remains as in #3 above. (a) (1 point) Solve the firm's problem to obtain the optimal labor choice, N". (b) (1 point) How many cookies (total output )) does Caroline produce? (c) (1 point) How much profit (#) does Caroline earn? (d) (4 points) Explain why Caroline changed her optimal choice for N* compared to #3. How did the change affect the firm's output and profit? What would have been output and profit if the firm had maintained the same N* you found in #3? 5. Bonus: Suppose the price for cookies increases to p = 2. All else remains as in #4 above. (a) (+1 point) Solve the firm's problem to obtain the optimal labor choice, N". (b) (+1 point) How many cookies (total output )) does Caroline produce? (c) (+1 point) How much profit (") does Caroline earn? (d) (up to +2 points) Explain why Caroline changed her optimal choice for N* compared to #4. How did the change affect the firm's output and profit? What would have been output and profit if the firm had maintained the same N* you found in #4

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

A serial leading- 1s detector is to be designed. A binary integer of arbitrary length is presented to the serial leading- 1s detector, most significant bit first, on input X. When a given bit is...

Damian owns a business that makes customized refrigerator magnets for other organizations to give away at job fairs and public events. His firm uses a Cobb-Douglas production function given by F(K,...

In a one-page paper, answer the following: What is the function of venture capital in the United States and why is it important and/or needed? Describe the seven constants that apply across any...

INTRODUCTION Driving back to Knoxville on Friday afternoon, Morgan finally had some time to think. Shed spent most of the week in Nashville meeting with many of the Tennessee Valley Authoritys (TVA)...

Please answer these questions and put them in a readable format (ex. 1a, 1b, 2a, 2b, etc...). No explanation needed. For number 7 you have to read the transcript to answer the question. 1. 1....

Please answer these questions and put them in a readable format (ex. 1a, 1b, 2a, 2b, etc...). No explanation needed. For question 7 you have to read the transcript screen shot then answer the...

1Answer the following parts.. Human lCapital Model: Fieinterpretthe human capital growth model as follows: Suppose there are two groups of people in a country, the lowskilled and the highskilled,...

1. The production technology of a firm is given by the following equation: Y = 15K .5N.5 Assume K initially equals 25 a. Fill in the first blank column below, showing what the output is per different...

Following the war, Grandpa Frank was very bullish on the potential of the French market. He saw a country that would not only experience short-term growth through its rebuilding effort, but also...

Most of the world's economic output is produced by China and Russia the U.S. and Japan the U.S. and the European Union China and Japan Russia and the European Union A multiple-choice question with...

Thanks in advance...detailed explanation V.2 The Blanchard OLG model for a closed economy is described by the two differential equations k = [( k) - a - (8 +g+b-m)k. ko> 0 given, (1) a = [5( in) - 8...

1) What is the marketing plan (4Ps/7Ps) for Shangari La Hotel? 2) Explain the marketing strategy - (sales and distribution) for Shangri La Hotel? 3) Describe the pricing strategy that ShangriLa hotel...

Describe how you will advise centre managers to monitor and review the flexible workforce arrangements. (60 words)

( 5 / 2 x ^ 2 1 / 2 square root x ) dx

HJ. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (1,500 pounds) has the following standards: The actual materials in a batch may vary from the standard...

Provence Bicycle Company manufactures road bikes. The following data for September of the current year are available: Quantity of direct labor used ...... 650 hrs. Actual rate for direct labor...

Carson Wood Products Company Presented the following factory overhead cost budget for the press Department for April 2012, during which it expected to require 10,000 hours of productive capacity in...

The following data related to factory overhead cost for the production of 4,000 computers: If productive capacity of 100% was 6,500 hours and the factory overhead cost budgeted at the level of 5,000...

The following information shows last year's quality-related costs for the Madrigal Company: Total sales for the year were $120,000,000.Required(a) Prepare a cost-of-quality report grouping costs into...

Please help me answer these questions, in paragraph format thank you! what are the biggest challenges to entrepreneurs? How can entrepreneurs overcome them? What can a new entrepreneur do to minimize...

1. Discuss the following: a) If you want stability, you should focus on change. b) What happens when an effect becomes a cause? c) If you do the opposite of what is expected, the reaction is changed....

2. In this chapter, the reader should reflect on the following concepts: Systemic, positive feedback loop, negative feedback loop, negative feed-back loop dominance, positive feedback loop dominance,...

1. To gain insight into communication situations regarding the fact that they should be understood by examining the relationship between the parts and the whole, and to provide an understanding that...