Suppose that a Örm has the following production function Q = min(2K; 3L): Draw the isoquants...

Suppose that a Örm has the following production function Q = min(2K; 3L): Draw the isoquants for output levels Q1 = 6 and Q1 = 12: Now assume the Örm is currently using 6 units of capital and 5 units of labor. What are the marginal products of K and L in this case?

Please give step by step solution.

Solutions

Expert Solution

Rahul Sunny answered 2 weeks ago

Next > < Previous

Related Solutions

Suppose a firm called, WeWorkTogether (Goal: profit maximization), has the following production function: Q = 2K...

Suppose a firm called, WeWorkTogether (Goal: profit maximization), has the following production function: Q = 2K 0.4 L 0.8. Q: units of output, K: units of capital, L: units of labor. If capital rents for $100 per unit per day, labor can be hired for $50 per unit per day, and the firm is minimizing costs, a. Find the long-run total cost of producing Q= 50 units b. Find the short-run total cost of producing Q= 50 units, when K is fixed...

Suppose a firmAc€?cs production function is given by the following equation: Q = min(5K, 10L) a....

Suppose a firmAc€?cs production function is given by the following equation: Q = min(5K, 10L) a. If the firm is using 4 units of capital and 3 units of labor, how much output are they producing? b. Is this firm operating efficiently? Why or why not? c. Suppose this firm wanted to increase production to 40 units, how many workers (L) and machines (K) should they employ, given w = 10 and r = 15? Draw the Isoquant and Isocost...

If the production function has strictly isoquants and is differentiable, then there will always be an...

If the production function has strictly isoquants and is differentiable, then there will always be an interior solution to the cost- minimization problem: productuon will use both point. Assume there are isocost curves. Justify the above statement by providing reasons.

3. Frisbees are produced according to the production function q = 2K+L where q =output of...

3. Frisbees are produced according to the production function q = 2K+L where q =output of frisbees per hour, K =capital input per hour, L =labor input per hour. a) If K = 10, how much L is needed to produce 100 frisbees per hour? b) If K = 25, how much L is needed to produce 100 frisbees per hour? c) Graph the q = 100 isoquant. Indicate the points on that isoquant deÖned in part a and part...

Show all work please. 3. Suppose the production function (technology) is given as q = min...

Show all work please. 3. Suppose the production function (technology) is given as q = min {2x1,6x2}, where both inputs x1 and x2 are able to vary. What kind of technology is this function? What is the corresponding cost function as a function of w1, w2, and q? Solve for this cost if w1 = 24, w2 = 18, and q = 2.

QUESTION 3 A firm's production function is Q = 2 KL, with MP L = 2K...

QUESTION 3 A firm's production function is Q = 2 KL, with MP L = 2K and MP K = 2L. The wage rate is $4 per hour, and the rental rate of capital is $5 per hour. If the firm wishes to produce 100 units of output in the long run, how many units of K and L should it employ? a. K = 6.33; L = 7.91. b. K = 2; L = 2. c. K = 4;...

4. Consider the following production functions: (i) Q = 4K2L2 (ii) Q = 2K + 4L...

4. Consider the following production functions: (i) Q = 4K2L2 (ii) Q = 2K + 4L (iii) Q = min(4K, 5L) a. Graph an isoquant for Q = 400 for each of the production functions above. b. In few words, explain what does the MRTS tell us about a production function? c. Find the MRTS for production functions (i) and (ii). d. Find the MRTS for production function (iii)

Suppose a firm has the production function, Q = 12KL. It has a contract to produce...

Suppose a firm has the production function, Q = 12KL. It has a contract to produce 144 units of output per day. One way to do is to use 3 units of capital (K) and 4 units of labor (L). Suppose a unit of labor costs $2 (wage = w) while a unit of capital costs $3 (r). What is the slope of the isocost line? A) 2/3 B) 1/4 C) 1/3 D) 3/2 At this combination of inputs, is...

Suppose a firm has the production function, Q = 12KL. It has a contract to produce...

Suppose a firm has the production function, Q = 12KL. It has a contract to produce 144 units of output per day. One way to do is to use 3 units of capital (K) and 4 units of labor (L). Suppose a unit of labor costs $2 (wage = w) while a unit of capital costs $3 (r). What is the Marginal Rate of Technical Substitution (MRTS) at this specific input ratio, i.e., K = 3 and L = 4?...

Suppose a firm has the production function, Q = 12KL. It has a contract to produce...

Suppose a firm has the production function, Q = 12KL. It has a contract to produce 144 units of output per day. One way to do is to use 3 units of capital (K) and 4 units of labor (L). Suppose a unit of labor costs $2 (wage = w) while a unit of capital costs $3 (r). What will be the marginal product of capital (MPK) when K = 3 units and L = 4 units? A) MPK =...

Subjects