1. If a firm has the following production function, and the firm is a monopoly with the following demand curve, find the MRPL equation for this firm. Step one, solve for the MPL: Step two, find the revenue function and derive the MR: Step three, remember the formula for the MRPL: 2. the demand and supply for labor in a market are as follows: Find the equilibrium wage rate and quantity of labor hired: Find the economic rent for workers at the equilibrium wage rate: If the workers want to optimize their economic rent, is the wage from part a the one they would choose? No, the economic rent is optimized by looking at the intersection of the MR and supply curve. You can see that if I set my wage at about $7.78, the economic rent for the workers is much bigger than the one found at the equilibrium wage rate. Source: the problems were inspired by the exercises on pages 297-298 in Study Guide For Microeconomics, 8th edition (2013) by J.Hamilton, and V.Suslow.
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