Labor Input (band members per year) 0 1 2 3 4 5 6 Total Output (gigs played per
ID: 1115861 • Letter: L
Question
Labor Input (band members per year) 0 1 2 3 4 5 6 Total Output (gigs played per year) 0 25 49 72 94 115 135 Question 7: The Abbey Road music studio is interested in forming a new band, Johnny and the Moondogs. Abbey Road's owners determine that the band would have the production function above for playing gigs. Abbey Road charges $200 for each gig the band plays. If Abbey Road's owners want to maximize profit, what is the maximum amount that they should pay the 2nd band member per year? C 1) S2400 C 2) $9800 C 3) $4900 C 4) $4800 Question 8: The Abbey Road music studio is interested in forming a new band, Johnny and the Moondogs. Abbey Road's owners determine that the band would have the production function above for playing gigs. Abbey Road charges $200 for each gig the band plays. What is the marginal product of the 6th band member? C 1) 135 gigs per year C 2) 20 gigs per year C 3) $2000 per year C4) $4000 per year Question 9: Bowser has many children, called Koopalings. He can only allow some of them to work for him, and he decides which ones to employ based on a meritocracy. This means: C 1) only those who would not be employed without his help will work for him C 2) those with the most skills will work for him C 3) those who cost the least will work for him C 4 everyone will be hired, but for less hours.Explanation / Answer
7).
If the owner of “Abbey Road” want to maximize profit, then for the 2nd band member, they wil pay “MP*200=(49-25)*200=24*200=4800”.
=>7(4).
8).
The MP of the 6th band member is given by, “135-115=20 gigs per years”.
8(2).
9).
Here he will decide “those with the most skills will work for him”.
9(2).
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