3 Acme Widget, Inc., has the following production function. Number of Workers o 1 2 3 4 5 6 Number of Widgets Prod uced o 8 15 21 26 30 33

a. Find the MPN for each level of employment.

b. Acme can get $5 for each widget it produces. How many workers will it hire if the nominal wage is $38? If it is $27? If it is $22?

c. Graph the relationship between Acme's labor demand and the nominal wage. How does this graph differ from a labor demand curve? Graph Acme's labor demand curve.

d. With the nominal wage fixed at $38, the price of widgets doubles from $5 each to $10 each. What happens to Acme's labor demand and production?

e. With the nominal wage fixed at $38 and the price of widgets fixed at $5, the introduction of a new automatic widget maker doubles the number of widgets that the same number of workers can produce. What happens to labor demand and production? f What is the relationship between your answers to part

(d) and part (e)? Explain.