Question
In: Economics
Suppose a production function is given by F ( K , L ) = K 1 2...
Suppose a production function is given by F ( K , L )
= K 1 2 L 1 2, the price of capital “r” is $16, and the price of
labor “w” is $16.
a. (5) What combination of labor and capital minimizes the cost of
producing 100 units of output in the long run?
b. (5) When r falls to $1, what is the minimum cost of producing
100 pounds of pretzels in the short run? In the long run?
c. (5) When r falls to $1, will the cost of producing 100 units of
output increase or decrease in the long-run? Explain.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
2. Suppose a production function is given by F ( K , L ) = K 1...
2. Suppose a production function is given by F ( K ,
L ) = K 1 2 L 1 2, the price of capital “r” is $16, and the price
of labor “w” is $16.
a. (5) What combination of labor and capital minimizes the cost of
producing 100 units of output in the long run?
b. (5) When r falls to $1, what is the minimum cost of producing
100 pounds of pretzels in the short run? In the...
Suppose a production function is given by F ( K , L ) = K^(1/2) L^(1/2), the...
Suppose a production function is given by F ( K , L )
= K^(1/2) L^(1/2), the price of capital “r” is $16, and the price
of labor “w” is $16.
a. (5) What combination of labor and capital minimizes the cost of
producing 100 units of output in the long run?
b. (5) When r falls to $1, what is the minimum cost of producing
100 pounds of pretzels in the short run? In the long run?
c. (5) When...
Suppose that the production function for your firm is given by: F(L,K)=L1/2K1/2 w=$1 and r=$1. In...
Suppose that the production function for your firm is given by:
F(L,K)=L1/2K1/2 w=$1 and r=$1. In the long-run, how many workers
and capital should you hire in order to produce Q units of output?
Select one: a. L=2Q; K=Q b. L=Q; K=Q2 c. L=0.5Q; K=0.5Q d. L=Q; K=Q
e. None of the above
Suppose a production function is given by f(K,L) = KL1/3 and that the price of capital...
Suppose a production function is given by f(K,L) = KL1/3 and
that the price of capital is $10 and the price of labor is $16. The
capital is fixed at the level K ̅ = 4. What is the quantity of
labor that minimizes the cost of producing any given output? What
is the minimum cost of producing y units of output? What are the
marginal cost of production and the average total cost, average
variable cost and the average...
Consider the production function F(L,K) = L^2/3 K^2/3 . (f) Does this production function exhibit increasing,...
Consider the production function F(L,K) = L^2/3 K^2/3 .
(f) Does this production function exhibit increasing, decreasing
or constant returns to scale? Explain.
(g) Find the total cost, average cost and marginal cost of
producing y units of output. Is the average cost increasing or
decreasing in y? Is the marginal cost higher or lower than the
average cost?
Question 2 The production of magic chairs requires only two
inputs: seats (S) and legs (L) (no other inputs are required...
3. Suppose the production function for widgets is given by:Q = f(K,L) = KL − 0.4K2...
3. Suppose the production function for widgets is given by:Q =
f(K,L) = KL − 0.4K2 − 0.4L2
(a) Suppose K = 10 (is fixed), derive an expression for and
graph the total product of labor curve (the production function for
a fixed level of capital) and the average productivity of labor
curve.
(b) At what level of labor input does the average productivity
reach a maxi- mum? How many widgets are produced at this point?
(c) Again, assuming K...
Consider the firm with production function given by q = f ( L , K )...
Consider the firm with production function given by q = f ( L ,
K ) = L ^(1/4) K^(1/4). If w = r = 4, what is the change in the
producer surplus when the price increases from $16 to $32? (round
your answer to one decimal place if necessary)
The production function of a firm is given by F(K, L)=KL. Assume that capital (K) is...
The production function of a firm is given by F(K, L)=KL. Assume
that capital (K) is fixed at K=1 in the short run. Then the amount
of labor (L) needed to produce 4 unit of output is equal to
___.
The production function of a firm is given by F(K, L)=KL. Assume that capital (K) is...
The production function of a firm is given by F(K, L)=KL. Assume
that capital (K) is fixed at K=1 in the short run. Then the amount
of labor (L) needed to produce 4 unit of output is equal to ___.
Group of answer choices 16 1 4 8 2
Suppose your production function for baseball bats is f(K, L) = L^1/5 K^1/5 and you are...
Suppose your production function for baseball bats is f(K, L) =
L^1/5 K^1/5 and you are a profit maximizing price taker. Use
minimizing costs to:
(a) Determine the conditional factor demands for labor and
capital (L = g(w, r, y) =? and K = h(w, r, y) =?). Use these to
derive the cost function.
(b) Derive the marginal and average cost functions.
(c) Derive the supply function for baseball bats.
(d) Given this supply function, use the conditional factor...
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