Question
QUESTION 3 - The Firm Problem The Model: Firms The representative firm profits is represented by the equation below (assume it is a perfectly competitive
QUESTION 3 - The Firm Problem
The Model: Firms
The representative firm profits is represented by the equation below (assume it is a perfectly competitive firm that takes wages and prices as given):
t = [ZtNt1 WtNt] (5)
3. a) Maximize the firms profits by taking the first order condition with respect to Nt. (10%)
3. b) Explain the economic meaning of the firm's first order condition. (10%)
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Introductory Econometrics A Modern Approach
Authors: Jeffrey M. Wooldridge
4th edition
978-0324581621, 324581629, 324660545, 978-0324660548
