1. The firm's short-run production function is given by Q left parenthesis K comma L right parenthesis equals space K to the power of 1 divided by 2 end exponent L to the power of 1 divided by 2 end exponent. Assume that the capital input (K) is held constant at 100 units, the market price that the firm receives per unit of output is $20, the per unit cost of capital is $30, and the cost per unit of labor is $50. Based on this information, the firm's "optimal" quantity of labor demanded is?

a.16

b.0

c.4

d. 2

e. 8

1. The cross-elasticity of factor demand between the two inputs used by the firm, Labor (L) and Capital (K), is estimated as -0.75. This implies that:

a. Labor (L) and Capital (K) are complements in production

b. The relationship between Labor (L) and Capital (K) is always negative.

c. Labor (L) and Capital (K) are substitutes in production.

d. Labor (L) and Capital (K) are substitutes in consumption.

e. Labor (L) and Capital (K) are complements in consumption.

1. The labor demand and supply functions are given as follows: DL = 500 - 2wandSL = -100 + 8w. Based on this information, what is the market-clearing (or equilibrium) wage?

1. Jack gains utility (U) from consumption (C) and Leisure (L).The maximum amount of leisure (L) he can consume on a weekly basis is 110 hours. His Utility Function is given by: U(C,L) = C,L. This Utility Function implies that Jack's Marginal Rate of Substitution (MRS) is: MRS = C/L. Jack receives $1,100 each week in non-labor income (from a government transfer program). Based on this information, his reservation wage is $10.00.

True or False.