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Exercise 1 Question B3 (2010) function: A firm faces the following production The firm is perfectly...
EXERCISE 1 COST MINIMIZATION, PART I Consider a firm with a Cobb-Douglas production function defined by...
EXERCISE 1 COST MINIMIZATION, PART I Consider a firm with a Cobb-Douglas production function defined by the equation Q = 32K0.5 0.25 where Q is output, K the capital input and I the labour input. The prices of both production factors are given to the firm: labour costs w = 32 per unit, capital r = 16 per unit. Imagine that the firm wants to produce 512 units of output at minimum cost. (a) Determine the (unique) stationary point, say...
QUESTION 6 1 poin Production. A firm uses capital and labour to produce output according to...
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 perfectly competitive firm faces a: Question 6 Not yet answered Points out of 1.00 Select...
A perfectly competitive firm faces a: Question 6 Not yet answered Points out of 1.00 Select one: a. perfectly elastic demand function. b. None of the answers is correct. c. perfectly inelastic demand function. p Flag question • d. demand function with unitary elasticity.
QUESTION 9 The perfectly competitive firm faces a downward sloping demand curve. constant marginal costs. a...
QUESTION 9 The perfectly competitive firm faces a downward sloping demand curve. constant marginal costs. a horizontal supply function. perfectly elastic demand. QUESTION 10 The short-run industry supply curve slopes up because the law of diminishing marginal product applies in the short run. wages increase as the industry increases output. the firms eventually experience diseconomies of scale. the higher price is needed to get more firms to enter the industry.
the firm faces a constant price (P) of $60 A firm in a perfectly competitive market...
the
firm faces a constant price (P) of $60
A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 + 69Q - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that profit is maximized at this...
1. Consider a steel firm that faces a convex isoquant production function where the inputs are...
1. Consider a steel firm that faces a convex isoquant production function where the inputs are labor and capital. The production function yields constant returns to scale. The firm is currently at a cost-minimizing combination of labor and capital for the desired level of output. Suppose the capital used in the production process emits low amounts of polluted wastewater into a nearby river. In order to promote the use of the environmentally friendly capital the government provides a unit subsidy...
1) Assume that a firm faces the following cost function: TC(q) = 980 + 10q2 –...
1) Assume that a firm faces the following cost function: TC(q) = 980 + 10q2 – 5q + 20 a) Derive the long-term supply curve for this individual firm. b) If market price is equal to p=40 what quantity would be supplied? c) Calculate profit at p=300. d) with free entry and exit and identical firms what would be the long term supply curve for this industry?
VILPELLO P IU points) 4. A firm produces an output with the production function Q=KL, where...
VILPELLO P IU points) 4. A firm produces an output with the production function Q=KL, where Q is the number of units of output per hour when the firm uses K machines and hires L workers each hour. The marginal products for the production function are MPK = L and MP, = K. The price of K is 4 and the price of L is 2. The firm is currently using K =16 and just enough L (you have to...
2) Assume that a firm faces the following production function: q(L, K) = {1/4K 3/4 a)...
2) Assume that a firm faces the following production function: q(L, K) = {1/4K 3/4 a) Does this function represent increasing, decreasing or constant return to scale? b) Do we have diminishing productivity for factors of production? c) Find short-run cost function if K=256, w=3 and r=4
2. Consider a firm producing pizza with production function q = KL, that faces input prices...
2. Consider a firm producing pizza with production function q = KL, that faces input prices w= $10 and r = $100 for labor and capital, respectively. a. Derive the isoquant equation. Find the isoquant of an output q = 1. Draw it in a figure with l in the horizontal axis and k in the vertical axis. b. Does this firm's production exhibit increasing, decreasing or constant returns to scale? Briefly explain c. Find the labor demand, and the...
EXERCISE 1 COST MINIMIZATION, PART I Consider a firm with a Cobb-Douglas production function defined by the equation Q = 32K0.5 0.25 where Q is output, K the capital input and I the labour input. The prices of both production factors are given to the firm: labour costs w = 32 per unit, capital r = 16 per unit. Imagine that the firm wants to produce 512 units of output at minimum cost. (a) Determine the (unique) stationary point, say...
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 perfectly competitive firm faces a: Question 6 Not yet answered Points out of 1.00 Select one: a. perfectly elastic demand function. b. None of the answers is correct. c. perfectly inelastic demand function. p Flag question • d. demand function with unitary elasticity.
QUESTION 9 The perfectly competitive firm faces a downward sloping demand curve. constant marginal costs. a horizontal supply function. perfectly elastic demand. QUESTION 10 The short-run industry supply curve slopes up because the law of diminishing marginal product applies in the short run. wages increase as the industry increases output. the firms eventually experience diseconomies of scale. the higher price is needed to get more firms to enter the industry.
the
firm faces a constant price (P) of $60
A firm in a perfectly competitive market sells all its product (Q) at a constant price (P) of $60. Suppose the total cost function (TC) for this firm is described by the following equation: 2 3 TC(Q) = 128 + 69Q - 140 + Q (a)Form the profit function and determine the output that maximizes the firm's profit. Evaluate the second order condition to assure that profit is maximized at this...
1) Assume that a firm faces the following cost function: TC(q) = 980 + 10q2 – 5q + 20 a) Derive the long-term supply curve for this individual firm. b) If market price is equal to p=40 what quantity would be supplied? c) Calculate profit at p=300. d) with free entry and exit and identical firms what would be the long term supply curve for this industry?
VILPELLO P IU points) 4. A firm produces an output with the production function Q=KL, where Q is the number of units of output per hour when the firm uses K machines and hires L workers each hour. The marginal products for the production function are MPK = L and MP, = K. The price of K is 4 and the price of L is 2. The firm is currently using K =16 and just enough L (you have to...
2) Assume that a firm faces the following production function: q(L, K) = {1/4K 3/4 a) Does this function represent increasing, decreasing or constant return to scale? b) Do we have diminishing productivity for factors of production? c) Find short-run cost function if K=256, w=3 and r=4
2. Consider a firm producing pizza with production function q = KL, that faces input prices w= $10 and r = $100 for labor and capital, respectively. a. Derive the isoquant equation. Find the isoquant of an output q = 1. Draw it in a figure with l in the horizontal axis and k in the vertical axis. b. Does this firm's production exhibit increasing, decreasing or constant returns to scale? Briefly explain c. Find the labor demand, and the...
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