Assume an isoquant for a fixed level of output equal to ¯y = 1/2x 1 2...
Assume an isoquant for a fixed level of output equal to ¯y = 1/2x 1 2 1 x 1 3 2 Fix w1 = 1. Show how the cost minimizing bundle changes as w2 moves from 1 to 2. You can graph x1 and x2 on separate graphs as a function of w.\
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Assume an isoquant for a fixed level of output equal to ¯y =
1/2x 1 2...
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input...
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input quantities that yield the same level of output. Higher isoquant: higher level of output Marginal Rate of Technical Substitution: MRTS is the slope of the isoquant at any input combination. It tells us the rate at which we must increase the qty of input 2 per unit decrease in qty of input 1. MRTS diminishes as we move down the isoquant from left to...
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input...
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input quantities that yield the same level of output. Higher isoquant: higher level of output Marginal Rate of Technical Substitution: MRTS is the slope of the isoquant at any input combination. It tells us the rate at which we must increase the qty of input 2 per unit decrease in qty of input 1. MRTS diminishes as we move down the isoquant from left to...
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10....
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10. (5 points) (w1, w2) respec- (2) Suppose that the price of product is p, and that the prices of factors are tively. Find the factor demand function ri(w, w2, p), x1(w1, w2, P), the supply function y(w1, W2, P), and the profit function T(w1, w2, p). (10 points)
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10....
a) f(x1,x2) = x1^1/4 x2^1/4, and w1 = 1 and w2 = 2 and output level...
a) f(x1,x2) = x1^1/4 x2^1/4, and w1 = 1 and w2 = 2 and output level is y. b) f(x1,x2) = x1^1/3 x2^1/3, and w1 = 4 and w2 = 2 and output level is y. Find x1∗ ,x2∗ and the cost associated with it, c(w1,w2,y).
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input...
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input quantities that yield the same level of output. Higher isoquant: higher level of output Marginal Rate of Technical Substitution: MRTS is the slope of the isoquant at any input combination. It tells us the rate at which we must increase the qty of input 2 per unit decrease in qty of input 1. MRTS diminishes as we move down the isoquant from left to...
1) Foreach of the production functions below, draw the isoquant passing througb the point z^(4,1). Label...
1) Foreach of the production functions below, draw the isoquant passing througb the point z^(4,1). Label at least two points on the isoquant. Also determine whether the technology exhibits CRS,IRS or DRS. a. f(x)- 2x2 b. f(x)-x1/2+X2 c. f(x)- max(xiX2) d. f(x)-xiX22 2) Eoreach of the production functions below, find the cost function and conditional factor demands if w1-2 and w2-4. What is the amount of x1 and x2 that minimizes the cost of producing 4 units of output? a....
Question 1: Cost Minimization and Cost Curves Suppose that Jennifer produces good y by using input...
Question 1: Cost Minimization and Cost Curves Suppose that Jennifer produces good y by using input xi and x2. The production function which Jennifer faces is: y = x} + x] The cost for every unit of xi is wi and the cost for every unit of x2 is w2. There is a fixed cost component F, which also forms a part of her total cost. (a) Write down the cost minimization problem. Solve this problem and express x1/x2 as...
Company A uses 3 inputs (x1,x2,x3) to produce output Q. Nothing is produced unless some amount...
Company A uses 3 inputs (x1,x2,x3) to produce output Q. Nothing is produced unless some amount of input X3 is utilized. At the current level of X3, the output Q is produced according to the production function Q = x11/2x21/2 Denote the input prices by (W1,W2,W3) and assume the level of X3 cannot be varied in the time period under consideration but that X1 and X2 can be varied to whatever levels the firm desires. 1. Derive this firm’s total...
QUESTION 11 Consider version I of the profit maximisation problem found in Additional_Information_for_Problem_Solving_Exercise.pdf With the technology...
QUESTION 11
Consider version I of the profit maximisation problem found in
Additional_Information_for_Problem_Solving_Exercise.pdf With the
technology in place, given output and input prices and fixed input
factor x_2, the maximum profit level that can be achieved is:
(Instruction: Type in the value in the cell below using two decimal
places. Do NOT use alphabetical characters, symbols such as $ or
commas as thousand separators. Example: “1000.00” is a valid entry,
but “Profit=$1,000.000” is not a valid numerical entry.)
Information for...
1. Consider the production function f(x1, x2) = 4x 11/2 x 21/3 . What is the...
1. Consider the production function f(x1, x2) = 4x 11/2 x 21/3 . What is the returns to scale? Show your work. 2. What is the TRS for the above production function? 3. What is the optimal level of output that maximizes profit given the output and input prices respectively as p, w1, w2?
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input quantities that yield the same level of output. Higher isoquant: higher level of output Marginal Rate of Technical Substitution: MRTS is the slope of the isoquant at any input combination. It tells us the rate at which we must increase the qty of input 2 per unit decrease in qty of input 1. MRTS diminishes as we move down the isoquant from left to...
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input quantities that yield the same level of output. Higher isoquant: higher level of output Marginal Rate of Technical Substitution: MRTS is the slope of the isoquant at any input combination. It tells us the rate at which we must increase the qty of input 2 per unit decrease in qty of input 1. MRTS diminishes as we move down the isoquant from left to...
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10. (5 points) (w1, w2) respec- (2) Suppose that the price of product is p, and that the prices of factors are tively. Find the factor demand function ri(w, w2, p), x1(w1, w2, P), the supply function y(w1, W2, P), and the profit function T(w1, w2, p). (10 points)
Suppose that a firm has the production function (1) Draw an isoquant for f(x1,x2) = 10....
TUTORIAL2 Chapter 7 Part 1 Key Concepts and Equations: Production Isoquant: shows all combinations of input quantities that yield the same level of output. Higher isoquant: higher level of output Marginal Rate of Technical Substitution: MRTS is the slope of the isoquant at any input combination. It tells us the rate at which we must increase the qty of input 2 per unit decrease in qty of input 1. MRTS diminishes as we move down the isoquant from left to...
1) Foreach of the production functions below, draw the isoquant passing througb the point z^(4,1). Label at least two points on the isoquant. Also determine whether the technology exhibits CRS,IRS or DRS. a. f(x)- 2x2 b. f(x)-x1/2+X2 c. f(x)- max(xiX2) d. f(x)-xiX22 2) Eoreach of the production functions below, find the cost function and conditional factor demands if w1-2 and w2-4. What is the amount of x1 and x2 that minimizes the cost of producing 4 units of output? a....
Question 1: Cost Minimization and Cost Curves Suppose that Jennifer produces good y by using input xi and x2. The production function which Jennifer faces is: y = x} + x] The cost for every unit of xi is wi and the cost for every unit of x2 is w2. There is a fixed cost component F, which also forms a part of her total cost. (a) Write down the cost minimization problem. Solve this problem and express x1/x2 as...
QUESTION 11
Consider version I of the profit maximisation problem found in
Additional_Information_for_Problem_Solving_Exercise.pdf With the
technology in place, given output and input prices and fixed input
factor x_2, the maximum profit level that can be achieved is:
(Instruction: Type in the value in the cell below using two decimal
places. Do NOT use alphabetical characters, symbols such as $ or
commas as thousand separators. Example: “1000.00” is a valid entry,
but “Profit=$1,000.000” is not a valid numerical entry.)
Information for...
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