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Question 3a Consider two farmers, each with an identical plot of land, and an identical production...
7. For the production function q min(K,4L ): (a) Assume that capital K is fixed at...
7. For the production function q min(K,4L ): (a) Assume that capital K is fixed at 100 units. Derive and plot: i, The total product function q(L) ii. The marginal product function MPL(L). iii. The average product function APL(L). (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short run average cost....
7. For the production function q= min(K, 4L) (a) Assume that capital K is fixed at...
7. For the production function q= min(K, 4L) (a) Assume that capital K is fixed at 100 units. Derive and plot Page 2 of . The total product function q(L) ii. The marginal product function MPL(L) ii. The average product function AP(L) (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short...
wContent/1703730/View?u=159815 QUESTION 2: On the derivation of the New-Classical PSSF (Price Surprise Supply Function) The Production...
wContent/1703730/View?u=159815 QUESTION 2: On the derivation of the New-Classical PSSF (Price Surprise Supply Function) The Production Function: Y=G+(1-a) L Labour Demand: W-P-A-aL Labour Supply: W - pe=B+bL BACKGROUND: This model assumes perfectly flexible wages. The key here is the assumption of asymmetric information requirements. The assumption is that firms need only know their own product price in order to evaluate their own labour demand. Since each firm knows its own product price, the aggregate demand for labour depends on actual...
Consider 2 firms with the following 2 different production functions (i.) y(L,K) = aL + bK...
Consider 2 firms with the following 2 different production functions (i.) y(L,K) = aL + bK (ii.) y(L,K) = L^0.5K^0.5 where y denotes the quantity produced and L and K are the amount of labor and capital, respectively. a. Assume K is fixed at 100. Do these production functions exhibit decreasing marginal products of labor? b. Assume K can be freely chosen. Do these production functions exhibit constant returns to scale? c. For each of the production functions, draw the...
Question 27 A perfectly competitive industry is composed of 100 firms. Each firm has an identical...
Question 27 A perfectly competitive industry is composed of 100 firms. Each firm has an identical short-run marginal cost function SMC = 5+10q (where q is the firm's level of output). If Q denotes industry output, what is the short-run market supply curve for output? a) Q = -50 + 10p if p > 5 and 0 if p 5 5 α Q = -5 + TOP p if p > 5 and 0 if p < 5 + α...
A firm wants to know how to minimize its costs for its new production plant, for...
A firm wants to know how to minimize its costs for its new production plant, for any desired level of output. Suppose the production is given by y = f(x1, x2) = 2 x11/2 x21/2, where x1 and x2 are inputs, and the input prices are w1 and w2. i. Sketch the cost minimization problem. Label your axes and graph appropriately. (1 point) ii. Find the optimal choices of x1 and x2. (2 points) iii. Find the cost function. (1...
third question the answer on the paper process 1. Let the production function beq Kili (K:...
third question
the answer on the paper
process
1. Let the production function beq Kili (K: capital, L: labor), the unit prices of capital and labor be both $1. (a) Find the cost function. 2b (b) If the firm with this production function is in a competitive market an many units of products should the firm produce? d the market price is S12, how 2. (a) Let the cost function be C(g)-F+mq G Is there economies of scale? (ii) If...
2. Consider an economy with many identical firms. Each firm produces according to a Cobb- Douglas...
2. Consider an economy with many identical firms. Each firm produces according to a Cobb- Douglas production function: y = AK α N 1−α where y is output, K is the amount of capital, N is the amount of labor and 0<α <1 is a parameter. (a) What is the marginal product of labor (MPN)? (Take a partial derivative with respect to N ) (b) What is the marginal product of labor when A = K = 1 , N...
Problem #3: Long-Run Labor Dernand and Factor Substitutability Suppose there are two inputs in the production...
Problem #3: Long-Run Labor Dernand and Factor Substitutability Suppose there are two inputs in the production function, labor (L) and capital (K), which can be combined to produe Y units of output according to the following production function Y = 30K + 10L The firm wants to produce 600 units of output 1. Draw the ot that corresponds to that level of production (600 units) in a graph that has L on the horizontal axis and K on the vertical...
Consider the following production function for an economy: 1. Y=2K1/4L3/4 (a) Suppose the capital stock is...
Consider the following production function for an economy: 1. Y=2K1/4L3/4 (a) Suppose the capital stock is K = 16 and its labour force is L = 1. Find: (i) GDP; (ii) the marginal product of capital; (iii) the real rental price of capital; (iv) labour's share of income. (b) Suppose further that aggregate consumption (C) is 80 per cent of disposable income, government spending is G = 1, the budget is balanced, and private sector investment is I = 6...
7. For the production function q min(K,4L ): (a) Assume that capital K is fixed at 100 units. Derive and plot: i, The total product function q(L) ii. The marginal product function MPL(L). iii. The average product function APL(L). (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short run average cost....
7. For the production function q= min(K, 4L) (a) Assume that capital K is fixed at 100 units. Derive and plot Page 2 of . The total product function q(L) ii. The marginal product function MPL(L) ii. The average product function AP(L) (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short...
wContent/1703730/View?u=159815 QUESTION 2: On the derivation of the New-Classical PSSF (Price Surprise Supply Function) The Production Function: Y=G+(1-a) L Labour Demand: W-P-A-aL Labour Supply: W - pe=B+bL BACKGROUND: This model assumes perfectly flexible wages. The key here is the assumption of asymmetric information requirements. The assumption is that firms need only know their own product price in order to evaluate their own labour demand. Since each firm knows its own product price, the aggregate demand for labour depends on actual...
Question 27 A perfectly competitive industry is composed of 100 firms. Each firm has an identical short-run marginal cost function SMC = 5+10q (where q is the firm's level of output). If Q denotes industry output, what is the short-run market supply curve for output? a) Q = -50 + 10p if p > 5 and 0 if p 5 5 α Q = -5 + TOP p if p > 5 and 0 if p < 5 + α...
third question
the answer on the paper
process
1. Let the production function beq Kili (K: capital, L: labor), the unit prices of capital and labor be both $1. (a) Find the cost function. 2b (b) If the firm with this production function is in a competitive market an many units of products should the firm produce? d the market price is S12, how 2. (a) Let the cost function be C(g)-F+mq G Is there economies of scale? (ii) If...
Problem #3: Long-Run Labor Dernand and Factor Substitutability Suppose there are two inputs in the production function, labor (L) and capital (K), which can be combined to produe Y units of output according to the following production function Y = 30K + 10L The firm wants to produce 600 units of output 1. Draw the ot that corresponds to that level of production (600 units) in a graph that has L on the horizontal axis and K on the vertical...
Consider the following production function for an economy: 1. Y=2K1/4L3/4 (a) Suppose the capital stock is K = 16 and its labour force is L = 1. Find: (i) GDP; (ii) the marginal product of capital; (iii) the real rental price of capital; (iv) labour's share of income. (b) Suppose further that aggregate consumption (C) is 80 per cent of disposable income, government spending is G = 1, the budget is balanced, and private sector investment is I = 6...
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