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Running head: NATURE VERSUS NURTURE
1
2
NATURE VERSUS NURTURE
Debate on Nature versus Nurture
Name
Course
Instructor
Institution
Date of Submission
Debate on Nature versus Nurture
First, it will be significant if we start by knowing what we mean
by nature and nurture. The term nature entails the genes and
hereditary factors that influence how people are perceived the
way they are. It encompasses both the physical and personality
features of an individual. On the other hand, nurture describes
the environmental variables that make people how they are.
Therefore, the environmental variables include but not limited
to the social relationship, culture, and childhood experiences.
Nature versus nurture debate is based on finding how the
genetic inheritance and the environmental factors have
contributed to the development of human. According to the view
of some of the greatest philosopher such as Plato, they argue
that some things are inborn (Davies, 2001). Therefore, the
behavior of a person does not need to be influenced by the
environmental factors; rather they occur naturally. Similarly,
another argument was that all or most of the behaviors
portrayed by people are as a result of inheritance. Others argued
that people’s behaviors are as a result of experience or learning.
Precisely, the following are ways in which the genetic and
environmental influences interact to influence the development
of an individual. Biologically, nature is behind a person growth
from the fetus to a normal adult. Similarly, the genetic makeup
of an individual is responsible for the skin color of an
individual, sex, hair and all features that we inherited.
Therefore, nature uses the genetic coding and this will help to
develop a person physically. Besides, nature will impart some
positive or negative features to an individual. Moreover, nurture
can be used by parents to improve the positive traits in their
child and reduce the effects of the negative characteristics. For
example, height is one of the traits that have been influenced by
the interaction of nature and nurture. A child might be born
from a family where people are tall, and he/she has the same
gene. However, in case he/she does not get proper nourishment,
or the environment is not supporting, then he/she might end up
not being tall.
Reference
Davies, K. (2001, April 17). Nature vs. Nurture Revisited.
Retrieved from http://www.pbs.org/wgbh/nova/body/nature-
versus-nurture-revisited.html
Top of Form
Submitted by ZEHLER, IAN (IFZ5002) on 2/15/2015 11:32:31
PM
Points Awarded
63.50
Points Missed
36.50
Percentage
63.5%
1.
SCENARIO B: Suppose that due to favorable economic
conditions, the price that this firm can sell its product for rises
to $22.
For question 1. Fill in Table B - Each box is worth ½ point for a
total of 9 points for Table B
TABLE B- The wage is still $150 and the price of output (Q) is
now $22.
L
Q
MPL
MRP
Marginal Profit
Total Profit
0
0
----
----
-------------
0
1
8
8
$
$
$
2
20
12
$
$
$
3
28
8
$
$
$
4
35
7
$
$
$
5
41
6
$
$
$
6
45
4
$
$
$
Table for Individual Question Feedback
Points Earned:
5.5/9.0
Correct Answer(s):
Box 1: 176;
Box 2: 26;
Box 3: 26;
Box 4: 264;
Box 5: 114;
Box 6: 140;
Box 7: 176;
Box 8: 26;
Box 9: 166;
Box 10: 154;
Box 11: 4;
Box 12: 170;
Box 13: 132;
Box 14: -18;
Box 15: 152;
Box 16: 88;
Box 17: -62;
Box 18: 90
2.
Use Scenario B/Table B to answer the questions 2 – 4 below.
(3 points) The profit maximizing output (Q) is .
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
35
3.
(3 points) The profit maximizing level of labor (L) input is
workers.
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
4
4.
(3 points) The maximum profit for this firm is .
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
170
5.
DOWNLOAD AND PRINT GRAPHING TEMPLATE (available
in the homework 3 instructions). This template already shows
the outcome from scenario A. You will be adding results from
scenario B to these graphs.
(2 points) Using Scenario B/Table B, go to Graph 1. Label the
new profit maximizing Q and L combination on the production
function as point B.
Table for Individual Question Feedback
Points Earned:
0.0/2.0
Correct Answer(s):
6.
(3 points) Using Scenario B/Table B, go to Graph 2 and draw
this firm’s new MRP curve (remember that MRP = P* MPL, and
since price changed, we know we have a new MRP curve!).
Shade in the new area of profit. Also label the new profit
maximizing point as letter B.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
7.
(3 points) Using Scenario B/Table B, draw this firm’s Supply
curve on Graph 3. You should construct a supply curve as we
did in lecture with point A representing the original price and
output combination from scenario A (original price was $20
combined with the profit maximizing Q of 28) and point B
representing the price and output combination after the change
in economic conditions in Scenario B (price rose to $22, and the
profit maximizing Q you found in your answer for #2 above).
Connect the two points and label your supply curve.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
8.
(2 points) When comparing Scenario A to Scenario B, the firm
now hires _______ workers.
A) more
B) fewer
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
9.
(2 points) When comparing Scenario A to Scenario B, the firm
now produces _____ output.
A) more
B) less
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
10.
(2 points) When comparing Scenario A to Scenario B, the firm
now earns _______ profit.
A) more
B) less
Feedback: Note that the firm changes its behavior due to the
increase in output price. The firm hires more workers and makes
more output in order to maximize profit. Remember that profit
maximization requires that workers be hired up to the point
where W=MRP. Consider the situation if the firm stayed with
only 3 workers. Once the price of output rises to $22, at 3
workers the wage is 150 and the MRP is 176. So at 3 workers,
WMRP for the 5th worker.
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
11.
SCENARIO C - We return to the original conditions (from
scenario A) and now we let wages change. In particular, an
increase in labor supply lowers the wage that the firm needs to
pay to $130.
For question 11. Fill in Table C - Each box is worth ½ point for
a total of 6 points for Table C
TABLE C- The wage has changed to $130 but the price of
output (Q) is back at its original value of $20.
L
Q
MPL
MRP
Marginal Profit
Total Profit
0
0
-----
-----
------------
0
1
8
8
$160
$
$
2
20
12
$240
$
$
3
28
8
$160
$
$
4
35
7
$140
$
$
5
41
6
$120
$
$
6
45
4
$80
$
$
Table for Individual Question Feedback
Points Earned:
3.0/6.0
Correct Answer(s):
Box 1: 30;
Box 2: 30;
Box 3: 110;
Box 4: 140;
Box 5: 30;
Box 6: 170;
Box 7: 10;
Box 8: 180;
Box 9: -10;
Box 10: 170;
Box 11: -50;
Box 12: 120
12.
Use Scenario C/Table C to answer the questions 12 – 14 below.
(3 points) The profit maximizing output is .
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
35
13.
(3 points) The profit maximizing level of labor input is
workers.
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
4
14.
(3 points) The maximum profit for this firm is .
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
180
15.
(2 points) Using Scenario C/Table C, go to Graph 1. Label the
profit maximizing Q and L combination as point C.
Table for Individual Question Feedback
Points Earned:
0.0/2.0
Correct Answer(s):
16.
(3 points) Using Scenario C/Table C, go to Graph 4 and draw in
this firm’s new wage line. The MRP curve is unchanged since
MRP = P* MPL, and neither P nor MPL has changed. Shade in
the new area for profit. Also label the profit maximizing point
as letter C.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
17.
(3 points) Using Scenario C/Table C, go to graph 3 and add this
firm’s new supply curve (remember that wages fell, so output
supply increases). Label as point C the price and output
combination occurring after the change in economic conditions
in Scenario C (P= $20, and the profit maximizing Q you found
in your answer for #12 above). You only have one point on this
supply curve, but you can sketch it as an upward sloping supply
curve that is parallel to the supply curve you drew earlier.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
18.
(2 points) When comparing Scenario A to Scenario C, the firm
now hires _______
A) more
B) fewer
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
19.
(2 points) When comparing Scenario A to Scenario C, the firm
now produces _____
A) more
B) less
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
20.
(2 points) When comparing Scenario A to Scenario C, the firm
now earns _______ profit.
A) more
B) less
Feedback: note that the firm changes its behavior due to the
lowered wage. The firm hires more workers and makes more
output in order to maximize profit. Remember that profit
maximization requires that workers be hired up to the point
where W=MRP. Consider the situation if the firm stayed with
only 3 workers. Once the wage falls to 130, at 3 workers the
wage is 130 and the MRP is 160. So at 3 workers, WMRP for
the 5th worker.
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
21.
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
$
$
$
Table for Individual Question Feedback
Points Earned:
12.0/15.0
Correct Answer(s):
Box 1: 10;
Box 2: 10;
Box 3: 200;
Box 4: 50;
Box 5: 50;
Box 6: 24;
Box 7: 14;
Box 8: 280;
Box 9: 130;
Box 10: 180;
Box 11: 34;
Box 12: 10;
Box 13: 200;
Box 14: 50;
Box 15: 230;
Box 16: 43;
Box 17: 9;
Box 18: 180;
Box 19: 30;
Box 20: 260;
Box 21: 51;
Box 22: 8;
Box 23: 160;
Box 24: 10;
Box 25: 270;
Box 26: 57;
Box 27: 6;
Box 28: 120;
Box 29: -30;
Box 30: 240
22.
Use Scenario D/Table D to answer the questions 22 – 24 below.
(3 points) The profit maximizing output is .
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
51
23.
(3 points) The profit maximizing level of labor input is
workers.
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
5
24.
(3 points) The maximum profit for this firm is .
Table for Individual Question Feedback
Points Earned:
3.0/3.0
Correct Answer(s):
270
25.
(3 points) Using Scenario D/Table D, go to Graph 1. Draw your
new production function (remember technology [total factor
productivity] increased, shifting the production function!) Label
the new profit maximizing Q and L combination as point D.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
26.
(3 points) Using Scenario D/Table D, go to Graph 5 and draw
this firm’s new MRP curve (remember that MRP = P* MPL, and
since MPL has changed, we know we have a new MRP curve!).
Shade in the new area of profit. Also label the new profit
maximizing point as letter D.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
27.
(3 points) Using Scenario D/Table D, go to Graph 3 and add this
firm’s new supply curve (a positive productivity shock
increases supply!). Label the price and output combination after
the change in economic conditions in Scenario D (P= $20, and
the profit maximizing Q you found in your answer for #22
above). You only have one point on this supply curve, but you
can sketch it as an upward sloping supply curve that is parallel
to the supply curves you drew earlier.
Table for Individual Question Feedback
Points Earned:
0.0/3.0
Correct Answer(s):
28.
(2 points) When comparing Scenario A to Scenario D, the firm
now hires _______ workers.
A) more
B) fewer
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
29.
(2 points) When comparing Scenario A to Scenario D, the firm
now produces _____ output.
A) more
B) less
Table for Individual Question Feedback
Points Earned:
0.0/2.0
Correct Answer(s):
A
30.
(2 points) When comparing Scenario A to Scenario D, the firm
now earns _______ profit.
A) more
B) less
Feedback:
note that the firm changes its behavior due to the increase in
total factor productivity. The firm hires more workers and
makes more output in order to maximize profit. Remember that
profit maximization requires that workers be hired up to the
point where W=MRP. Consider the situation if the firm stayed
with only 3 workers. Given the change in MPL, at 3 workers the
wage is 150 and the MRP is 200. So at 3 workers, WMRP for
the 6th worker.
Table for Individual Question Feedback
Points Earned:
2.0/2.0
Correct Answer(s):
A
31.
Upload the completed graphing template here.
Macro Graph 2.pdf
PDF file was very unclear, and had no graphs/answers on it.
Table for Individual Question Feedback
Points Earned:
0.0/0.0
Bottom of Form
DOWNLOAD AND PRINT GRAPHING TEMPLATE (available
in the homework 3 instructions). This template already shows
the outcome from scenario A. You will be adding results from
scenario B to these graphs.
5. (2 points) Using Scenario B/Table B, go to Graph 1. Label
the new profit maximizing Q and L combination on the
production function as point B.
6. (3 points) Using Scenario B/Table B, go to Graph 2 and draw
this firm's new MRP curve (remember that MRP = P*MPL, and
since price changed, we know we have a new MRP curve!).
Shade in the new area of profit. Also label the new profit
maximizing point as letter B.
7. (3 points) Using Scenario B/Table B, draw this firm's Supply
curve on Graph 3. You should construct a supply curve as we
did in lecture with point A representing the original price and
output combination from scenario A (original price was S20
combined with the profit maximizing Q of 28) and point B
representing the price and output combination after the change
in economic conditions in Scenario B (price rose to S22, and the
profit maximizing Q you found in your answer for #2 above).
Connect the two points and label your supply curve.
15. (2 points) Using Scenario C/Table C, go to Graph 1. Label
the profit maximizing Q and L combination as point C.
16. (3 points) Using Scenario C/Table C, go to Graph 4 and
draw in this firm's new wage line. The MRP curve is unchanged
since MRP = P*MPL, and neither P nor MPL has changed.
Shade in the new area for profit. Also label the profit
maximizing point as letter C.
17. (3 points) Using Scenario C/Table C, go to graph 3 and add
this firm's new supply curve (remember that wages fell, so
output supply increases). Label as point C the price and output
combination occurring after the change in economic conditions
in Scenario C (P= S20, and the profit maximizing Q you found
in your answer for #12 above). You only have one point on this
supply curve, but you can sketch it as an upward sloping supply
curve that is parallel to the supply curve you drew earlier.
25. (3 points) Using Scenario D/Table D, go to Graph 1. Draw
your new production function (remember technology [total
factor productivity] increased, shifting the production function!)
Label the new profit maximizing Q and L combination as point
D
26. (3 points) Using Scenario D/Table D, go to Graph 5 and
draw this firm's new MRP curve (remember that MRP = P *
MPL, and since MPL has changed, we know we have a new
MRP curve!). Shade in the new area of profit. Also label the
new profit maximizing point as letter D
27. (3 points) Using Scenario D/Table D, go to Graph 3 and add
this firm's new supply curve (a positive productivity shock
increases supply!). Label the price and output combination after
the change in economic conditions in Scenario D (P= $20, and
the profit maximizing Q you found in your answer for #22
above). You only have one point on this supply curve, but you
can sketch it as an upward sloping supply curve that is parallel
to the supply curves you drew earlier.
FOR GRAPHING QUESTIONS: when graphing make sure you
fully label everything you add to the graph, as was done in the
lectures. If you don’t label everything, you will lose points. Use
different colors when adding to your graphs if possible – this
will make your graphs easier to read. You must draw your
graphs on the graphing template provided.
Work through this document BEFORE beginning homework 3.
SCENARIO A - Consider a firm that has the following
relationship between labor and output, i.e., a production
function. Along this production function, we hold land, capital
(K) and technology (total factor productivity) fixed.
TABLE A- The current wage is $150 and the price of output (Q)
is $20.
L
Q
MPL
MRP
Marginal Profit
Total Profit
0
0
------
-------
--------------------
0
1
8
8
160
10
10
2
20
12
240
90
100
3
28
8
160
10
110
4
35
7
140
-10
100
5
41
6
120
-30
70
6
45
4
80
-70
0
*note that the values in the shaded part of the table are
provided, but you should able to calculate all of these values.
You will need to fill in similar tables in homework 3, so make
sure you are comfortable with these calculations NOW.
It should be clear from this table that the profit maximizing
amount of labor is 3, the profit maximizing amount of output
(Q) is 28 and maximum profit is $110.
A sketch of this firm’s production function, including the profit
maximizing Q and L combination (labeled point A) is shown
below. You should be able to hand sketch this production
function using the information from table A.
A sketch of this firm’s W/MRP labor market diagram is shown
below. The profit maximizing point is labeled (point A) and the
blue shaded area is the profit. You should be comfortable hand
sketching the graph below using the information from table A.
Scenario A will be your starting point for homework 3. You
will be examining several alternative scenarios for this firm
(Scenario’s B, C and D), and each time you will compare the
new situation to the original case in scenario A.
AQLPF[Land, K, A]328
Name:_____________________________ PSUemail address:
__________________________
GRAPHING TEMPLATE – print this document and hand draw
your answers on the graphs provided. Then scan your work into
a SINGLE multi-page pdf. You will be able to attach that pdf
file to your homework submission on ANGEL.
Graph 1:
Graph 2:
Graph 3:
Graph 4:
Graph 5:
1 | Page
PQ

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  • 1. Running head: NATURE VERSUS NURTURE 1 2 NATURE VERSUS NURTURE Debate on Nature versus Nurture Name Course Instructor Institution Date of Submission Debate on Nature versus Nurture First, it will be significant if we start by knowing what we mean by nature and nurture. The term nature entails the genes and hereditary factors that influence how people are perceived the way they are. It encompasses both the physical and personality features of an individual. On the other hand, nurture describes the environmental variables that make people how they are. Therefore, the environmental variables include but not limited to the social relationship, culture, and childhood experiences. Nature versus nurture debate is based on finding how the genetic inheritance and the environmental factors have contributed to the development of human. According to the view of some of the greatest philosopher such as Plato, they argue that some things are inborn (Davies, 2001). Therefore, the behavior of a person does not need to be influenced by the environmental factors; rather they occur naturally. Similarly, another argument was that all or most of the behaviors
  • 2. portrayed by people are as a result of inheritance. Others argued that people’s behaviors are as a result of experience or learning. Precisely, the following are ways in which the genetic and environmental influences interact to influence the development of an individual. Biologically, nature is behind a person growth from the fetus to a normal adult. Similarly, the genetic makeup of an individual is responsible for the skin color of an individual, sex, hair and all features that we inherited. Therefore, nature uses the genetic coding and this will help to develop a person physically. Besides, nature will impart some positive or negative features to an individual. Moreover, nurture can be used by parents to improve the positive traits in their child and reduce the effects of the negative characteristics. For example, height is one of the traits that have been influenced by the interaction of nature and nurture. A child might be born from a family where people are tall, and he/she has the same gene. However, in case he/she does not get proper nourishment, or the environment is not supporting, then he/she might end up not being tall. Reference Davies, K. (2001, April 17). Nature vs. Nurture Revisited. Retrieved from http://www.pbs.org/wgbh/nova/body/nature- versus-nurture-revisited.html Top of Form Submitted by ZEHLER, IAN (IFZ5002) on 2/15/2015 11:32:31 PM Points Awarded 63.50
  • 3. Points Missed 36.50 Percentage 63.5% 1. SCENARIO B: Suppose that due to favorable economic conditions, the price that this firm can sell its product for rises to $22. For question 1. Fill in Table B - Each box is worth ½ point for a total of 9 points for Table B TABLE B- The wage is still $150 and the price of output (Q) is now $22. L Q MPL MRP Marginal Profit Total Profit 0 0 ---- ---- ------------- 0 1 8 8 $ $ $ 2 20 12 $
  • 4. $ $ 3 28 8 $ $ $ 4 35 7 $ $ $ 5 41 6 $ $ $ 6 45 4 $ $ $ Table for Individual Question Feedback Points Earned: 5.5/9.0 Correct Answer(s): Box 1: 176; Box 2: 26; Box 3: 26;
  • 5. Box 4: 264; Box 5: 114; Box 6: 140; Box 7: 176; Box 8: 26; Box 9: 166; Box 10: 154; Box 11: 4; Box 12: 170; Box 13: 132; Box 14: -18; Box 15: 152; Box 16: 88; Box 17: -62; Box 18: 90 2. Use Scenario B/Table B to answer the questions 2 – 4 below. (3 points) The profit maximizing output (Q) is . Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 35 3. (3 points) The profit maximizing level of labor (L) input is workers. Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s):
  • 6. 4 4. (3 points) The maximum profit for this firm is . Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 170 5. DOWNLOAD AND PRINT GRAPHING TEMPLATE (available in the homework 3 instructions). This template already shows the outcome from scenario A. You will be adding results from scenario B to these graphs. (2 points) Using Scenario B/Table B, go to Graph 1. Label the new profit maximizing Q and L combination on the production function as point B. Table for Individual Question Feedback Points Earned: 0.0/2.0 Correct Answer(s): 6. (3 points) Using Scenario B/Table B, go to Graph 2 and draw this firm’s new MRP curve (remember that MRP = P* MPL, and since price changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter B. Table for Individual Question Feedback
  • 7. Points Earned: 0.0/3.0 Correct Answer(s): 7. (3 points) Using Scenario B/Table B, draw this firm’s Supply curve on Graph 3. You should construct a supply curve as we did in lecture with point A representing the original price and output combination from scenario A (original price was $20 combined with the profit maximizing Q of 28) and point B representing the price and output combination after the change in economic conditions in Scenario B (price rose to $22, and the profit maximizing Q you found in your answer for #2 above). Connect the two points and label your supply curve. Table for Individual Question Feedback Points Earned: 0.0/3.0 Correct Answer(s): 8. (2 points) When comparing Scenario A to Scenario B, the firm now hires _______ workers. A) more B) fewer Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A
  • 8. 9. (2 points) When comparing Scenario A to Scenario B, the firm now produces _____ output. A) more B) less Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A 10. (2 points) When comparing Scenario A to Scenario B, the firm now earns _______ profit. A) more B) less Feedback: Note that the firm changes its behavior due to the increase in output price. The firm hires more workers and makes more output in order to maximize profit. Remember that profit maximization requires that workers be hired up to the point where W=MRP. Consider the situation if the firm stayed with only 3 workers. Once the price of output rises to $22, at 3 workers the wage is 150 and the MRP is 176. So at 3 workers, WMRP for the 5th worker. Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A
  • 9. 11. SCENARIO C - We return to the original conditions (from scenario A) and now we let wages change. In particular, an increase in labor supply lowers the wage that the firm needs to pay to $130. For question 11. Fill in Table C - Each box is worth ½ point for a total of 6 points for Table C TABLE C- The wage has changed to $130 but the price of output (Q) is back at its original value of $20. L Q MPL MRP Marginal Profit Total Profit 0 0 ----- ----- ------------ 0 1 8 8 $160 $ $ 2 20 12 $240 $ $ 3 28 8
  • 10. $160 $ $ 4 35 7 $140 $ $ 5 41 6 $120 $ $ 6 45 4 $80 $ $ Table for Individual Question Feedback Points Earned: 3.0/6.0 Correct Answer(s): Box 1: 30; Box 2: 30; Box 3: 110; Box 4: 140; Box 5: 30; Box 6: 170; Box 7: 10; Box 8: 180;
  • 11. Box 9: -10; Box 10: 170; Box 11: -50; Box 12: 120 12. Use Scenario C/Table C to answer the questions 12 – 14 below. (3 points) The profit maximizing output is . Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 35 13. (3 points) The profit maximizing level of labor input is workers. Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 4 14. (3 points) The maximum profit for this firm is . Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 180
  • 12. 15. (2 points) Using Scenario C/Table C, go to Graph 1. Label the profit maximizing Q and L combination as point C. Table for Individual Question Feedback Points Earned: 0.0/2.0 Correct Answer(s): 16. (3 points) Using Scenario C/Table C, go to Graph 4 and draw in this firm’s new wage line. The MRP curve is unchanged since MRP = P* MPL, and neither P nor MPL has changed. Shade in the new area for profit. Also label the profit maximizing point as letter C. Table for Individual Question Feedback Points Earned: 0.0/3.0 Correct Answer(s): 17. (3 points) Using Scenario C/Table C, go to graph 3 and add this firm’s new supply curve (remember that wages fell, so output supply increases). Label as point C the price and output combination occurring after the change in economic conditions in Scenario C (P= $20, and the profit maximizing Q you found in your answer for #12 above). You only have one point on this supply curve, but you can sketch it as an upward sloping supply curve that is parallel to the supply curve you drew earlier.
  • 13. Table for Individual Question Feedback Points Earned: 0.0/3.0 Correct Answer(s): 18. (2 points) When comparing Scenario A to Scenario C, the firm now hires _______ A) more B) fewer Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A 19. (2 points) When comparing Scenario A to Scenario C, the firm now produces _____ A) more B) less Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A 20. (2 points) When comparing Scenario A to Scenario C, the firm
  • 14. now earns _______ profit. A) more B) less Feedback: note that the firm changes its behavior due to the lowered wage. The firm hires more workers and makes more output in order to maximize profit. Remember that profit maximization requires that workers be hired up to the point where W=MRP. Consider the situation if the firm stayed with only 3 workers. Once the wage falls to 130, at 3 workers the wage is 130 and the MRP is 160. So at 3 workers, WMRP for the 5th worker. Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A 21. 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
  • 16. $ $ $ Table for Individual Question Feedback Points Earned: 12.0/15.0 Correct Answer(s): Box 1: 10; Box 2: 10; Box 3: 200; Box 4: 50; Box 5: 50; Box 6: 24; Box 7: 14; Box 8: 280; Box 9: 130; Box 10: 180; Box 11: 34; Box 12: 10; Box 13: 200; Box 14: 50; Box 15: 230; Box 16: 43; Box 17: 9; Box 18: 180; Box 19: 30; Box 20: 260; Box 21: 51; Box 22: 8; Box 23: 160; Box 24: 10;
  • 17. Box 25: 270; Box 26: 57; Box 27: 6; Box 28: 120; Box 29: -30; Box 30: 240 22. Use Scenario D/Table D to answer the questions 22 – 24 below. (3 points) The profit maximizing output is . Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 51 23. (3 points) The profit maximizing level of labor input is workers. Table for Individual Question Feedback Points Earned: 3.0/3.0 Correct Answer(s): 5 24. (3 points) The maximum profit for this firm is . Table for Individual Question Feedback Points Earned: 3.0/3.0
  • 18. Correct Answer(s): 270 25. (3 points) Using Scenario D/Table D, go to Graph 1. Draw your new production function (remember technology [total factor productivity] increased, shifting the production function!) Label the new profit maximizing Q and L combination as point D. Table for Individual Question Feedback Points Earned: 0.0/3.0 Correct Answer(s): 26. (3 points) Using Scenario D/Table D, go to Graph 5 and draw this firm’s new MRP curve (remember that MRP = P* MPL, and since MPL has changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter D. Table for Individual Question Feedback Points Earned: 0.0/3.0 Correct Answer(s): 27. (3 points) Using Scenario D/Table D, go to Graph 3 and add this firm’s new supply curve (a positive productivity shock increases supply!). Label the price and output combination after the change in economic conditions in Scenario D (P= $20, and
  • 19. the profit maximizing Q you found in your answer for #22 above). You only have one point on this supply curve, but you can sketch it as an upward sloping supply curve that is parallel to the supply curves you drew earlier. Table for Individual Question Feedback Points Earned: 0.0/3.0 Correct Answer(s): 28. (2 points) When comparing Scenario A to Scenario D, the firm now hires _______ workers. A) more B) fewer Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A 29. (2 points) When comparing Scenario A to Scenario D, the firm now produces _____ output. A) more B) less Table for Individual Question Feedback Points Earned: 0.0/2.0 Correct Answer(s): A
  • 20. 30. (2 points) When comparing Scenario A to Scenario D, the firm now earns _______ profit. A) more B) less Feedback: note that the firm changes its behavior due to the increase in total factor productivity. The firm hires more workers and makes more output in order to maximize profit. Remember that profit maximization requires that workers be hired up to the point where W=MRP. Consider the situation if the firm stayed with only 3 workers. Given the change in MPL, at 3 workers the wage is 150 and the MRP is 200. So at 3 workers, WMRP for the 6th worker. Table for Individual Question Feedback Points Earned: 2.0/2.0 Correct Answer(s): A 31. Upload the completed graphing template here. Macro Graph 2.pdf PDF file was very unclear, and had no graphs/answers on it. Table for Individual Question Feedback Points Earned: 0.0/0.0 Bottom of Form
  • 21. DOWNLOAD AND PRINT GRAPHING TEMPLATE (available in the homework 3 instructions). This template already shows the outcome from scenario A. You will be adding results from scenario B to these graphs. 5. (2 points) Using Scenario B/Table B, go to Graph 1. Label the new profit maximizing Q and L combination on the production function as point B. 6. (3 points) Using Scenario B/Table B, go to Graph 2 and draw this firm's new MRP curve (remember that MRP = P*MPL, and since price changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter B. 7. (3 points) Using Scenario B/Table B, draw this firm's Supply curve on Graph 3. You should construct a supply curve as we did in lecture with point A representing the original price and output combination from scenario A (original price was S20 combined with the profit maximizing Q of 28) and point B representing the price and output combination after the change in economic conditions in Scenario B (price rose to S22, and the profit maximizing Q you found in your answer for #2 above). Connect the two points and label your supply curve. 15. (2 points) Using Scenario C/Table C, go to Graph 1. Label the profit maximizing Q and L combination as point C. 16. (3 points) Using Scenario C/Table C, go to Graph 4 and draw in this firm's new wage line. The MRP curve is unchanged since MRP = P*MPL, and neither P nor MPL has changed. Shade in the new area for profit. Also label the profit maximizing point as letter C. 17. (3 points) Using Scenario C/Table C, go to graph 3 and add this firm's new supply curve (remember that wages fell, so output supply increases). Label as point C the price and output combination occurring after the change in economic conditions
  • 22. in Scenario C (P= S20, and the profit maximizing Q you found in your answer for #12 above). You only have one point on this supply curve, but you can sketch it as an upward sloping supply curve that is parallel to the supply curve you drew earlier. 25. (3 points) Using Scenario D/Table D, go to Graph 1. Draw your new production function (remember technology [total factor productivity] increased, shifting the production function!) Label the new profit maximizing Q and L combination as point D 26. (3 points) Using Scenario D/Table D, go to Graph 5 and draw this firm's new MRP curve (remember that MRP = P * MPL, and since MPL has changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter D 27. (3 points) Using Scenario D/Table D, go to Graph 3 and add this firm's new supply curve (a positive productivity shock increases supply!). Label the price and output combination after the change in economic conditions in Scenario D (P= $20, and the profit maximizing Q you found in your answer for #22 above). You only have one point on this supply curve, but you can sketch it as an upward sloping supply curve that is parallel to the supply curves you drew earlier. FOR GRAPHING QUESTIONS: when graphing make sure you fully label everything you add to the graph, as was done in the lectures. If you don’t label everything, you will lose points. Use different colors when adding to your graphs if possible – this will make your graphs easier to read. You must draw your graphs on the graphing template provided. Work through this document BEFORE beginning homework 3. SCENARIO A - Consider a firm that has the following
  • 23. relationship between labor and output, i.e., a production function. Along this production function, we hold land, capital (K) and technology (total factor productivity) fixed. TABLE A- The current wage is $150 and the price of output (Q) is $20. L Q MPL MRP Marginal Profit Total Profit 0 0 ------ ------- -------------------- 0 1 8 8 160 10 10 2 20 12 240 90 100 3 28 8 160 10 110 4
  • 24. 35 7 140 -10 100 5 41 6 120 -30 70 6 45 4 80 -70 0 *note that the values in the shaded part of the table are provided, but you should able to calculate all of these values. You will need to fill in similar tables in homework 3, so make sure you are comfortable with these calculations NOW. It should be clear from this table that the profit maximizing amount of labor is 3, the profit maximizing amount of output (Q) is 28 and maximum profit is $110. A sketch of this firm’s production function, including the profit maximizing Q and L combination (labeled point A) is shown below. You should be able to hand sketch this production function using the information from table A. A sketch of this firm’s W/MRP labor market diagram is shown below. The profit maximizing point is labeled (point A) and the blue shaded area is the profit. You should be comfortable hand sketching the graph below using the information from table A.
  • 25. Scenario A will be your starting point for homework 3. You will be examining several alternative scenarios for this firm (Scenario’s B, C and D), and each time you will compare the new situation to the original case in scenario A. AQLPF[Land, K, A]328 Name:_____________________________ PSUemail address: __________________________ GRAPHING TEMPLATE – print this document and hand draw your answers on the graphs provided. Then scan your work into a SINGLE multi-page pdf. You will be able to attach that pdf file to your homework submission on ANGEL. Graph 1: Graph 2: Graph 3: Graph 4: Graph 5: 1 | Page
  • 26. PQ