SCENARIO D - In this final scenario, we again return to our original conditions

Question

SCENARIO D - In this final scenario, we again return to our original conditions (from scenario A) and consider a positive productivity shock, just like we did in the lectures. In particular, let the MPL of each worker rise by two, due to an increase in total factor productivity (denoted A in the lecture), relative to the initial conditions. For question 21, fill in Table D. Each box is worth ½ point for a total of 15 points for Table D TABLE D- The wage is $150 and the price of output (Q) is $20. L Q MPL MRP Marginal Profit Total Profit 0 0 ----- ----- ----------- 0 1 $ $ $ 2 $ $ $ 3 $ $ $ 4 $ $ $ 5 $ $ $ 6 $ $ $ How do we find Q, that is the only thing that I do not know how to find

Explanation / Answer

Given, wage = 150$

price of output (Q)= 20$

Labor cost= 0 + 150+300+450+ 600+750 +900 = 3150

Total Product= 120 +270 +320+ 570+720+870+1020

=3890

So, Q= 3890

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