Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S:...
Ive done this question a couple of times but my answers are not correct according to the marking scheme Problem B2 (8 points). Producer Theory: Cost Minimisation. Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S: where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 1 kg of kiwi fruits and 3 hours of labour, he can produce 1 bottle of juice....
Using the production function Q = ( and output levels of Q=2, Q=4, Q=6 A). Suppose the price of L and K is $3/hr. On a graph show isocost lines corresponding to total costs of $12, $24, and $36. Using isoquants and isocost lines, locate three points on the expansion path and draw the expansion path. Show your calculations. B). Using the three points on the expansion path, calculate the firm's long run total and average costs at each of...
10 pt 2 Assume a production function exists and is Q = (K^.25 L^.75) let a firm have a total of $1,100 to spend on labor and capital. Let price of labor equal $5 and price of capital equals $10 1) calculate the optimal values of Q, and the new isoquants and plot the LR expansion path. 2) Keeping K at 25, and letting L vary, plot the SR expansion path and the TPL curve
1. Suppose the production function is given by Q = LK, where MPL = K and MPK - L. The level of output Q = 100 and both wage and interest rates are equal to one, so that war- a) Given that the wage increases to 4. determine the elasticity of demand for labour at the new wage. Indicate whether the wage bill will increase or decrease as wage increases to 6. b) Find the linear demand function for labour...
QUESTION 6 1 poin Production. A firm uses capital and labour to produce output according to the following production function: q(KL)=KL. It pays $15 per hour for using capital and hires labour at $20 per hour. Select all that applies: a. The long run output expansion path for this firm is a straight line Marginal rate of technical substitution is given by MRTSu" SLK 2L O C. This production function exhibits constant return to scale. O d. Assume that the...
A small firm uses inputs L & K to produce output Q, and the production function is Q = K + 4L. The firm needs to produce exactly Q* output. The price of K is $2 and the price of L is $1. What is the firm’s total cost function TC(Q*)?
1. There is a furniture manufacturer using labor (L) and capital (K) to produce tables. Its production function is given by q= 10L^.75 K^.40. It pays a wage of $5 per hour and rents capital at a rate of $15. The firm wants to find the cost-minimizing bundle of inputs to produce 10,000 tables. Assume K is on the y-axis in what follows. Write out the firm’s cost function. Calculate the firm’s isocost equation. What is the slope of the...
A firm produces gizmos according to the production function Q =10KL , where Q is the quantity of gismos produced, K is the quantity of capital rented and L is the quantity of labour hired. The manager has been given a production target: Produce 9,000 gizmos per day. He is informed that the daily rental price of capital is $400 per unit and the wage rate is $200 per day. a) Currently, the firm has 10 units of capital. How...
7. Assume that the long-run production function can be expressed as Q-SKL? Where Q is quantity of output, K is the quantity of capital and L is the quantity of labor. If capital is fixed at 10 units in the short run then the short-run production function is: Q=10KL b. Q=50KL? Q=10L? d. 0=50L Q=500KL 8. For a linear total cost function: a. MC will be downward sloping b. MC = AVC c. AVC is upward sloping and linear d....
A firm produces gizmos according to the production function Q=10KL, where is the quantity of gismos produced, K is the quantity of capital rented and L is the quantity of labour hired. The manager has been given a production target: Produce 9,000 gizmos per day. He is informed that the daily rental price of capital is $400 per unit and the wage rate is $200 per day. a) Currently, the firm has 10 units of capital. How many workers should...