Last updated: July 27, 2019
Topic: Essay database
Sample donated:

2.

Number of Workers
Ounces of Pot Harvested
Marginal Product of Labor
Marginal Revenue Product
0
0
0
0
1
4
4
10
2
10
6
10
3
14
4
10
4
17
3
10
5
19
2
10
6
20
1
10
b.

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Number of Workers
Ounces of Pot Harvested
Revenue

(Assuming every ounce is sold)
Cost
Profit
0
0
0
0
0
1
4
40
25
15
2
10
100
50
50
3
14
140
75
65
4
17
170
100
70
5
19
190
125
65
6
20
200
150
50
Answer: I should hire 4 workers to make the best profit.

 

3.

Raising federal funds rates directly increases borrowing interest rates which generally slows down the economy. This means that companies would be find it difficult to stretch their capital if they want to hire more people, or raise salaries in order to compete with other companies on quality labor. In the long run, both quality and quantity of employment by companies operating within the area of the funds rate increase would suffer due to tighter total funding.
No. Based on the formula, the federal funds rate would be inversely proportional with an expression involving employment rate. Thus, raising federal funds rate leads to a decrease of employment.
In the short run, raising the federal fund rate could be seen to affect short term employment mainly by reducing employment turnover which could stabilize some industries since very fast turnovers usually result to productivity slowdown.
4.