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2. Assume a firm can produce according to the production function: ? = ?(?, ?) = ? + 3? Assume the wage, the cost of labor, is 6, and rent the cost of capital, is 12. What is the best combination of labor and capital to produce 12 units with? Illustrate your answer to part a with an isoquant/isocost drawing. If the wage decreased to $2, would this change how the firm will produce? If so, how? 3. Assume a...
4. Suppose that your production function is q(L) = 10L". a. In a table, calculate the output, average product and marginal product for L = 1,2,3,..., 9. b. Suppose fixed costs are $100 and the price of labor is $20. In a table, calculate the average cost and marginal cost for L = 1, 2, 3, ..., 9. c. If you could sell your output for $9, how many workers would you hire? 5. You need to expand production, either...
For each of the following examples, draw a representative isoquant. Make sure to label the axes. Explain briefly why you drew each isoquant the way you drew it. a) A firm finds that it can always trade two units of labor for one unit of capital and still keep output constant, regardless of how many units of labor or capital have already been used. b) A firm needs either cats or dogs to produce its output. Cats and dogs don’t...
Please help! Please show all work! 2. (21 points. Suppose a firm's production function is given by Q = L 1/2*K12. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL = 72 L 1/2K1/2and MPK = 12L12K-1/2 a) Suppose the price of labor is w=18, and the price of capital is r=2. Derive the firm's total cost function. b) What is the firm's marginal cost? c) For this problem, you will sketch the graph...
I understand this question is very long, but please only answer if you can complete all of it. Thank you so much in advance!! Suppose a short-run production function is described as Q = 30L - 0.05L2 where L is the number of labors used each hour. Derive the equation for Marginal Product of labor (MPL): Determine how much output with the 200th worker contribute: Determine the amount of labor (L) where output (Q) is maximized (known as Lmax):...
Please help! Show all work and label answers clearly please! Thank you! 2. (12 total points, Suppose a firm can use either Capital (K) or Labor (L) in a production process. The firm's production function is given by Q = 5L + 15K. The price of Capital is $20 per unit and the price of Labor is $8 per unit. a) (4 points) What is the firm's Total Cost function? TC(Q) = b) (8 points) Suppose the firm is producing...
Suppose a firm’s production function is given by Q = L1/2*K1/2. The Marginal Product of Labor and the Marginal Product of Capital are given by: MPL = ½ L-1/2K1/2and MPK = ½ L1/2K-1/2 a) Suppose the price of labor is w = 18, and the price of capital is r = 2. Derive the firm’s total cost function. b) What is the firm’s marginal cost? c) For this problem, you will sketch the graph of the firm’s isoquant for Q...
A firm is employing 100 hours of labor and 50 tons of cement to produce 500 blocks. Labor costs $4 per hour and cement costs $12 per ton. For the quantities employed, MPL = 3 and MPC = 2. Show this situation in an isoquant-isocost diagram. Is the firm producing at minimum cost? If not, explain and show in the diagram, how the firm can produce the same output at a lower total cost.
2. Assume that a firm needs to produce 500 units of output and it has ability to choose how much capital and labor to use as inputs. Firm's production function and marginal products of factors are 2VL, and MPK 100L ых 100K . Use this information to answer the following questions. In your computations keep at least three decimal places. (a) If initial wage w is $12.50 and rental rate of capital, r, is $17.50, find the cost-minimizing labor- capital...
I understand this question is very long, but please only answer if you can complete all of it. When I posted it the first time I received a-d, which I am including below. I am not sure if they are correct. Thank you so much in advance!! Suppose a short-run production function is described as Q = 30L - 0.05L2 where L is the number of labors used each hour. Derive the equation for Marginal Product of labor (MPL): ...