Exam #1 Part 1A (40 points total) Fill in the following table (filling in Table correctly 6 points). L Q 0 1 2 3 4 5 0 55 115 155 185 205 6 215 MPL MRP ---- Marginal Profit ---- ------ Total Profit 0 Question 3 6 pts Given that the current wage is $95 and the price of output (Q) is equal to $3.00, complete the table on your exam sheet. NOTE: This work is to be done using the Exam Sheet 1 Part 1 A . You will upload this work, along with other work to be done on this sheet, to question #10 on this exam. Enter the word "Finished" into the text box directly below when ready to move on. HTML Editore Ix E 3 Ex? BI U A FB : 2 Vx LAO НІ ТА 121 > Question 4 9 pts Use your table on the exam sheet to answer the following questions: 1. How many workers will the firm hire to maximize profits? 2. What are the maximum profits? 3. How much output is produced at profit maximization? NOTE: You need to answer this question fully in the text box located below. Be complete with your answers. This question is worth 9 points! HTML Editore Β Ι Ο Α Ix E Ex? vx LAO | 121 Question 5 6 pts Now draw the W/MRP Labor Market Diagram associated with the table above on the area indicated on your exam sheet. Draw this as we did in the lectures, being sure to be clear on the areas that represent: . labor costs, MRP (label the curve exactly as we did in lectures and homework), and the profit or loss (with actual numbers) • Identify L* (as we did in lectures) . Use different colors if at all possible. Label this initial point where the firm maximizes profit as point A. NOTE: You will be adding a point B to this diagram later in this part of the exam. NOTE: This work is to be done using the Exam Sheet 1 Part 1 A D. You will upload this work, along with other work to be done on this sheet, to question #10 on this exam. Enter the word "Finished" into the text box directly below when ready to move on. HTML Editor BI U A А TE xx, : E V !AO * :12pt Paragraph O words Question 6 3 pts Draw a production function diagram in the indicated area on your exam sheet, making sure you label the diagram completely including this initial point as Point A. NOTE: You will be adding a Point B to this diagram later in this part of the exam. NOTE: This work is to be done using the Exam Sheet 1 Part 1 A D. You will upload this work, along with other work to be done on this sheet, to question #10 on this exam. Enter the word "Finished" into the text box directly below when ready to move on. HTML Editora BI U A IX E 333 X X : E Vw 10 * 1 12pt DAN Paragraph O words Question 7 3 pts Draw a supply curve on your exam sheet in the indicated area. Locate Point A consistent with your Points A above. To get a second point on this original supply curve, pretend that prices go up by a dollar and map out the change in the profit maximizing output, like we did in the lectures. This will give us our original supply curve. NOTE: You will be adding a point B to this diagram later in this part of the exam. NOTE: This work is to be done using the Exam Sheet 1 Part 1 A D. You will upload this work, along with other work to be done on this sheet, to question #10 on this exam. Enter the word "Finished" into the text box directly below when ready to move on. HTML Editora B I VA, A IX EX X, SE vx @ 40 * 11 12pt Paragraph Question 8 5 pts Suppose, due to a technological innovation, the marginal product of each worker rises by four. At the same time, due to tight labor markets, the wages that you must pay rise to $115 per day. Additionally, preferences for your product rise and thus prices rise to $4.00. Given these new conditions, on a piece of scrap paper, fill in a table like the following. The current wage is $115 and the price of output (Q) is equal to $4.00. NOTE: You will not need to submit this table, but it will help you answer the following THREE questions. Exam 1 Table 2 L Q MPL MRP Marginal Profit Total Profit 0 0 0 1 2 3 4 5 6 1. How many workers will you hire to maximize profits? 2. What are the maximum profits? 3. How much output is produced at profit maximization? NOTE: You need to answer this question fully in the text box located below. Be complete with your answers. This question is worth 5 points! HTML Editora BI U A IX EEXX: E & AO * 12pt x Paragraph O words Question 9 8 pts 1. Now show these results on the W/MRP Labor Market diagram on your exam sheet labeling the new equilibrium point as Point B. 2. Show these results on your Production Function diagram on your exam sheet being sure to label everything including Point B. 3. Show these results on your Supply diagram on your exam sheet, being sure to label Point B. NOTE: Be sure to label everything completely. Use colors if possible. NOTE: This work is to be done using the Exam Sheet 1 Part 1 A D. You will upload this work, along with other work to be done on this sheet, to question #10 on this exam. Enter the word "Finished" into the text box directly below when ready to move on. HTML Editora BIŲ A 工人三三三 xx, : Vw ODT 12pt Paragraph O words