You Have Been Hired to Replace the Manager of a Firm

question 152

Essay

You have been hired to replace the manager of a firm that used only two inputs,capital and labor,to produce output.The firm can hire as much labor as it wants at a wage of $5 per hour and can rent as much capital as it wants at a price of $50 per hour.After you look at the company books,you learn that the company has been using capital and labor in amounts that imply a marginal product of labor of 50 and a marginal product of capital of 100.Do you know why the firm hired you?

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Definitions:

Consciousness

The state of being aware of and able to think about one's environment, thoughts, feelings, and sensations.

Circadian Rhythms

Natural, internal processes that regulate the sleep-wake cycle and repeat roughly every 24 hours.

Body Temperature

A measure of the body's ability to generate and get rid of heat, indicative of the physical state of the body, typically around 37°C (98.6°F) in humans.

Hypothalamus

A region of the brain that controls an enormous number of bodily functions including hunger, thirst, sleep, and emotional activity.