Labor Input (band members per year) 0 1 2 3 4 5 6 Total Output (gigs played per
ID: 1117694 • 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 59: 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? 1 135 gigs per year 2) 20 gigs per year 3) $2000 per year 4) $4000 per year Question 46: If the elasticity of demand for illegal drugs is relatively inelastic, then a decrease in the supply of illegal drugs will C 1) have no effect on the consumption of illegal drugs 2) increase the price of illegal drugs by a large amount but decrease the consumption of drugs by a smaller amount (on a percentage basis) C 3) decrease the price of illegal drugs and increase the consumption of illegal drugs (on a percentage basis) 4) increase the price of illegal drugs by a small amount and decrease the consumption of drugs by a larger amount (on a percentage basis) Question 47: The equilibrium wage in the market for scientists is $30/hour. Now, the government imposes a minimum wage of S35/hour. This will C 1) increase in the demand for scientists. 2) increase the supply of scientists 3) create a shortage of scientists 4) create a surplus of scientists.Explanation / Answer
45) Marginal Product is the change in total output when an additional one unit of input is employed.
Here total output of 6 band members is 135 and total output of 5 band members is 115.
So the marginal product of the 6th band member is (135 - 115)=20 gigs per year.
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46)When the elasticity of demand is relatively inelastic, it means:
(% change in quantity demanded) / (% change in price)<1
% change in quantity demanded < % change is in price
A percentage change in quantity demanded is less than percentage change in price.
So when supply is decreased, it results in:
Increase the price of illegal drugs by a large amount but decrease the consumption of drugs by a smaller amount ( on a percentage basis)
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47)The equilibrium wage rate for scientists is $30/hr. That is the supply and demand functions for scientists intersects at a point where the wage rate is equal to $30/hr. When the government imposes a minimum wage rate of $35/hr, it creates an excess supply of scientists at that point. That is the demand for scientists is lower than its supply. So it Creates a Surplus of Scientists
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