Question
In: Economics
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 curves associated with
producing 40 units at the lowest cost.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Show all work please. 3. Suppose the production function (technology) is given as q = min...
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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.
1) Suppose that a firm’s production function is q=10L^0.25 K^0.75. The cost of a unit of...
1) Suppose that a firm’s production function is q=10L^0.25
K^0.75. The cost of a unit of labor is $30 and the cost of a unit
of capital is $90. a. The firm is currently producing 120 units of
output. Derive the cost-minimizing quantities of labor and capital
(i.e. in the long run). What is the total cost?
b. The firm now wants to increase output to 160 units. If
capital is fixed at the level you found in part a)...
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.
Suppose the production function of PowerGuns Co. is given by Q = 25LK where Q is...
Suppose the production function of PowerGuns Co. is given by Q =
25LK
where Q is the quantity of guns produced in the month, L is the
number of workers employed, and K is the number of machines used in
the production. The monthly wage rate is $3,000 per worker and the
monthly rental rate for a machine is $6,000. Currently PowerGuns
Co. employs 25 workers and 40 machines. Assume perfect divisibility
of labor and machines.
What is the total...
Marginal costs of production are given by the following function: MC(Q) = 4 − Q Q...
Marginal costs of production are given by the following
function: MC(Q) = 4 − Q Q ≤ 2 ,2Q − 2 Q > 2 (a) Plot the
marginal cost curve. (b) Give the expressions for V C(Q) and AV
C(Q). (c) Plot AV C(Q) on the plot from (a). (d) Give the
expression for the supply curve of this firm. (e) Is it possible to
find a different MC(Q) function that gives rise to the same supply
curve? If yes,...
John’s utility function is given by the following equation ?(?, ?) = min(2?, 5?), where x...
John’s utility function is given by the following equation
?(?, ?) = min(2?, 5?),
where x is the unit of good X consumed, and y is the unit of
good Y consumed. John’s budget is $140, price of good X (? ) is $3,
and price of good Y (? ) is $10. Show all the steps, with
definition of every new notation used in the steps.
a) What is John’s optimal consumption (?∗, ?∗)? Graph the
optimal consumption along...
Suppose the production function for widgets is given by q = kl -0.8k2- 0.2l2, where...
Suppose the production function for widgets is given by
q = kl -0.8k2- 0.2l2,
where q represents the annual quantity
of widgets produced, k represents annual capital input, and l
represents annual labor input.
Suppose k = 10; graph the total and average productivity of
labor curves. At what level of labor input does this average
productivity reach maximum? How many widgets are produced at that
point?
Again, assuming that k = 10, graph the MPL curve. At
what...
Suppose the production function for widgets is given by q = kl -0.8k2- 0.2l2, where...
Suppose the production function for widgets is given by
q = kl -0.8k2- 0.2l2,
where q represents the annual quantity
of widgets produced, k represents annual capital input, and l
represents annual labor input.
Suppose k = 10; graph the total and average productivity of
labor curves. At what level of labor input does this average
productivity reach maximum? How many widgets are produced at that
point?
Again, assuming that k = 10, graph the MPL curve. At
what...
2. Suppose that a firm's production function is given by Q = KL(MPK = L and...
2. Suppose that a firm's production function is given by Q =
KL(MPK = L and MPL = K), where Q is the quantity of output, K is
units of capital, and L is units of labor. The price per unit of
labor and capital are $30 and $20, respectively.
(a) How many units of labor and capital should the firm use if
it wants to minimize the cost of producing 600 units of output?
(b) Suppose that the firm...
The production function for the Roundtree Laser Company is: Q=(10L^.5)(K^.3)(M^.3) where: Q: number of lasers produced...
The production function for the Roundtree Laser Company is:
Q=(10L^.5)(K^.3)(M^.3)
where: Q: number of lasers produced per week L: amount of labor
used per week K: the amount of capital used per week M: quantity of
raw materials used per week
a) Does the production function exhibit decreasing returns to
scale?
b) Does the production function exhibit diminishing marginal
returns?
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