Producer Theory (ISI)

[TheFlash]

ISI 2006 ME 2 Q 10)

In this question for the long run cost function, will we take w=40 or w=10? According to me it should be 40 coz labor is hired on weekly basis and long run is covering an entire month.  But with that I am getting labor = 12.5 units in part 2, which can't be possible coz labor can't be in decimals.
Help please.  

[Asd1995]

You're correct. I'm getting the same. btw if you're preparing for ISI interview, are you going to do macro and math?

Long run profit equation= long run revenue minus long run cost= 1 month revenue - 1 month cost=p(units produced per month) - (wage per month)*labour - (rental rate per month)*capital

[TheFlash]

Oh Thanks.

Yes. I am not doing macro. They have asked micro or maths in previous year interviews. And I don't have any maths questions as such to practice apart from DSE.

What about you?

[Asd1995]

Last year they didn't give an option, asked only micro.

Where are you solving micro from?

[TheFlash]

ISI papers for concepts.

[Asd1995]

Oh. What did you score in the exam?

[TheFlash]

They haven't given marks as far as I know.

[Asd1995]

Did you not cross check with the answer key posted here?

[TheFlash]

Nah. I didn't. Couldn't find the question paper to match the answers that I marked in the paper.

[Asd1995]

alright bud, best of luck. heard 80% of the weightage is the paper itself so you might wanna have an idea.