Please help with this macroeconomics question?
3)Suppose production in the economy could be represented by the following Cobb-Douglas production function: Y=3K^(1/3) L^(2/3) . Suppose the economy has 100 units of capital and a labor force of 100 workers . a) Compute the equilibrium values for the following three variables: - real wage rate, - real rental rate on capital, and - total payments to labor in this economy. b) Suppose there is a sudden wave of immigration. How will this affect the equilibrium values of the following?. Indicate by one of the following: rise, fall, no change or insufficient information. Real Wage Rate, Real Rental Rate on Capital ,Total Payments to Labor c) Suppose there is an unfortunate earthquake which destroys half of the capital stock. How will this affect the equilibrium values of the following. Indicate by one of the following: rise, fall, no change or insufficient information? Real Wage Rate, Real Rental Rate on Capital ,Total Payments to Labor
Calculating the supply function (Microeconomics)?
To answer this I'd actually need a little more information about what w, r, and x are. But just in case, I'm going to assume that w and r are the wage and capital rates, and that x is the production of the good. Thus, if w and r are held constant, the cost function only depends on the amount you produce (x). I hope this is right! If this is the case, then this is the total cost of producing x: C(x) = 2√(wrx³) <- this is the same as what you have... I just rearranged it to make it more clear. A firm's supply function is the function that defines the level at which they will produce. A firm produces at the level when their marginal cost equals their marginal revenue (which is the price for a competitive market). Thus, the supply curve is the firm's marginal cost curve. The marginal cost of producing a product x is the additional cost that comes from producing one more unit (∆C) given the current level of production x. Technically, it's actually the cost of producing an infinitely small fraction of a unit ∂C divided by the infinitely small fraction of a unit ∂x. If you're familiar with calculus, this is the partial derivative of the cost function with respect to x: ∂C/∂x. C = 2√(wrx³) MC = ∂C/∂x = 2√(wr)*(1.5)x^(1.5-1) = 3√(wrx) So, this firm's marginal cost curve is: MC = 3√(wrx) Hope this helps!
Microeconomics: With normally shaped Supply & demand curves the imposition of a tax on a good will result in?
B) Equilibrium price rising by less than the amount of the tax. A tax on good will is an added cost of production. This will result in a decrease in supply, represented by a leftward shift in the supply curve. With the supply curve shifting left, the new equilibrium point will be a point of higher price, lower quantity. Because the supply and demand curves are normal, they are neither horizontal or vertical; they are somewhere in between. This means that the increase in price will be somewhat less than the amount of the tax. You can illustrate this using a graph: Show the shift in the supply curve along with the demant curve. Mark the old and new equilibrium points. Plot a 3rd point where the new price intersects the old equilibrium quantity: this gives you a right triangle when you connect the 3 points. The vertical leg of the triangle represents the change in equilibrium price; the hypotenuse represents the amount of the tax. Since the hypotenuse is the longest leg of a right triangle, the amount of the tax is more than the amount of the price change.
Cost Production Function- What does it mean to derive in terms of supply, wage, & rent?
In microeconomics, total cost = TC = wL + rK where w is the wage and r is the rent That's what you should be inserting your labor and capital into, but you need to solve them in terms of x. You need to give more information though. Is this a long run problem or a short run problem? I'll assume it's long run since you haven't fixed capital or labor in your description. However, you have four production functions here. Do you need to solve all of them? Here's how to solve one of them: take the partial derivative of F(K,L) with respect to labor; take the partial derivative with respect to capital; take the partial derivative with respect to the Lagrangean multiple, which I will use /| to denote. Here's a Lagrangean Lagr. = wL + rK + /|{x - F(K,L)} insert w and r Lagr. = L + 32K + /|{x - 3KL} 1.dLagr/dL = 1 + /|{-3K} 2.dLagr/dK = 32 + /|{-3L} 3.dLagr//| = x - 3KL Solve 1 and 2 separately in terms of the /| symbol, then set them equal to each other until you get K or L on one side. Then, insert that into 3 and solve in terms of K and L separately. Insert those K and L functions into the total cost function. That's your answer....I think. Your question doesn't leave me confident that I know what your teacher is asking for.
Microeconomics please answer. urgent?
i don't be conscious of the formula on the suited of my head so i'm unable to help you w/ your question. interior the intervening time, I propose which you look on your e book and choose the topics via looking those formula. It should not be that tough.
What is the importance of mathematics in economics?
Calculus is one of the simplest, and more important, mathematical tools in economics. Differential calculus, functions, limits, and derivatives are used to measure economic information. Economic models, for instance, intensively use differential equations. On a more advanced level, Nobel Prizes in Economy could hardly be obtained without heavy use of mathematics. The 1969 Nobel Prize-winners Ragnar Frisch and JanTinbergen used a good amount of math. Leonid Kantorovich, a mathematician himself, won a Nobel prize in 1975 in economics based on mathematical ideas. The Nobel laureates in Economic Sciences. of 2010, Peter Diamond, Dale Mortensen and Christopher Pissarides developed a mathematical theory of the market. Arrow’s Impossibility Theorem (which states that there is no way of aggregating individual preferences, i.e., voting, into a single ordering satisfying certain natural conditions) gave the Nobel Prize in Economics in 1972 to Kenneth Arrow, and is a purely mathematical theory of voting (referred to as the Gibbard-Satterthwaite theorem). This celebrated Impossibility Theorem corresponds substantially to the statement that every ultrafilter on a finite set is principal, and so is reducible to a quite basic concept of mathematical logic and topology.Some references:Allen R.G,D, Mathematical Analysis for Economists, London Macmillan and Co, Ltd, (1962)Nemchinov, V.S., The Use of Mathematics in Economics, Massachusetts M.I.T., Press, (1964).
What is the relationship between supply and demand?
“Demand” and “supply” are mere potential and positioning until instantiated in a buy/sell sales transaction. If you check out of a grocery store or have your hair cut, magic happens as “title” passes to you and the payment process validates that “supply” has fulfilled funded demand. If store merchandise is there under Vendor Managed Inventory schemes with the vendor maintaining title, the magic is double as “title” for what you bought “instantly” passes from the vendor to the store and from the store to you. Tracing back chronologically from your moment of buy/sell magic, one encounters demand-shaping “functions” - f(x1,x2,x3…) ->y1,y2.y3 having to do with your interests, ability to pay, awareness of brands…etc. and on the supplier side supply shaping functions - f(x1,fx2, fx3…)-y1,y2,y3…, mechandising or service strategy, pricing, staffing levels, erlang sufficiency (length of service delays) etc.Positioning demand and supply for successful moment of magic are heavily impacted by project plan realities - notably weather, congestion/time to market, supply chain competence and others as well as structural and organizational realities. U.S. personal consumption has a run rate of almost $14 trillion, while a lot of “magic” is missed because of errors and delays on both sides.
What are the different methods of charging depreciation?
Methods of charging depreciation:Straight Line MethodDiminishing Balance MethodDouble-Declining-Balance MethodSum-of-year’s-digits MethodAccelerated Depreciation MethodUnits of Activity Depreciation Method
What is the effect of determining price by law rather than market forces?
if by law you could set the same price as market forces would deliver then of course nothing would be any different. but this is impossible because there are millions of prices, all constantly changing, and markets allow people to try and charge different prices for the same thing. if you are familiar with basic economic analysis, imagine a simple downward sloping demand curve and an upward sloping supply curve. then draw in a horizontal line for the legal price. The first thing is that everyone would face the same price. Shops would not be legally able to offer discounts or charge more. If the law set too high a price then the amount people would be willing to supply would be greater than the amount people wanted to buy at that price. Hence the 'mountains' of excess food that the Common Market used to be famous for. Since some suppliers would be willing to sell their unsold produce for less than the legal price, they would try to find inducements to make you buy their stuff, even if it cost them a bit. Bribes, special offers on other items, you can imagine. There would probably be a black market where you could buy the items at less than the legal price (eg as with goods that have high duty rates, like cigarettes - you can think of the tax as adding an extra legal price to each cigarette). Next imagine that the law sets too low a price. More people will want to buy than people would be willing to sell at that price (eg FA Cup final tickets). So you have queues, rations etc as people scramble to get the goods/services. Black markets where you can pay more to get the item (ticket touts). Overall, if the price is wrong, then the economy will be inefficient because the wrong amount of that item will get produced. So the country as a whole will end up worse off because the system isnt working to full efficiency. Obviously the size of the effect depends on how far the legal price is from the market determined price.