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1. (Production function) Condsider a representitive firm with a production function which is (i) twice continuously...
Please explain and show all the steps instead of just giving an answer. 1. (Production function)...
Please explain and show all
the steps instead of just giving an answer.
1. (Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable; (ii) eahibits positive and diminishing marginal product and (ii) has constant return to scale Y F(K, L) Given the capital rental price R and the wage w, and the good price P is normalized to 1, the firm can choose K and L to maximize its profit: max F(K.L) -...
(Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable;...
(Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable; (ii) exhibits positive and diminishing marginal product and (ii) has constant return to scale: Y = F(K, L) Given the capital rental price R and the wage w, and the good price P is normalized to 1, the firm can choose K and L to maximize its profit: max F(K, L) - RK - wL K,L 3. (Solow Model) Denote that Y F(K, L)...
Please explain and show all the steps instead of just giving an answer. (Production function) Condsider...
Please explain and show all the steps instead of just giving an
answer.
(Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable; (i) exhibits positive and diminishing marginal product and (iii) has constant return to scale: 1. Y = F(K, L) Given the capital rental price R and the wage w, and the good price P is normalized to 1, the firm can choose K and L to maximize its profit: max F(K,...
Question 4 a) The firm ACME has the production function f ( K , L)=K 2...
Question 4 a) The firm ACME has the production function f ( K , L)=K 2 3 L 2 3 . Calculate an expression for the marginal product of labour, L , and establish if it is increasing, constant or decreasing. Verify if ACME’s production technology exhibits diminishing, constant or increasing returns to scale. (6p) b) Set up ACME’s long run profit maximization problem and derive the factor demands for optimal choice of y. Question 5 (Credit question) Try to...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the outpu...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the output good is p > 0. The prices of the inputs Labour and Capital are w> 0 and r>0 respectively. The firm chooses L and K in order to maximize profits, (L.K). (a) How does the short-run production function differ from the long-run production function? (b) Write out the profit function for the firm, (L,K). (c) Derive the first order...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm e...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
Consider the production function given by y = f(L,K) = L^(1/2) K^(1/3) , where y is...
Consider the production function given by y = f(L,K) = L^(1/2) K^(1/3) , where y is the output, L is the labour input, and K is the capital input. (a) Does this exhibit constant, increasing, or decreasing returns to scale? (b) Suppose that the firm employs 9 units of capital, and in the short-run, it cannot change this amount. Then what is the short-run production function? (c) Determine whether the short-run production function exhibits diminishing marginal product of labour. (d)...
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...
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
Question 2: Production Function and Profit Maxi- mization Consider a production function of Cobb-Douglas form: for...
Question 2: Production Function and Profit Maxi- mization Consider a production function of Cobb-Douglas form: for some α, β E (0, 1) (a) Plot the isoquant of F (b) Derive that technical rate of substitution of F. Does F exhibit diminishing technical rate of substitution? (c) Does F exhibit diminishing marginal productivity of labor? What about marginal (d) Find out the conditions for α and β such that F is increasing return to scale, (e) Suppose that F does not...
Please explain and show all
the steps instead of just giving an answer.
1. (Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable; (ii) eahibits positive and diminishing marginal product and (ii) has constant return to scale Y F(K, L) Given the capital rental price R and the wage w, and the good price P is normalized to 1, the firm can choose K and L to maximize its profit: max F(K.L) -...
(Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable; (ii) exhibits positive and diminishing marginal product and (ii) has constant return to scale: Y = F(K, L) Given the capital rental price R and the wage w, and the good price P is normalized to 1, the firm can choose K and L to maximize its profit: max F(K, L) - RK - wL K,L 3. (Solow Model) Denote that Y F(K, L)...
Please explain and show all the steps instead of just giving an
answer.
(Production function) Condsider a representitive firm with a production function which is (i) twice continuously differentiable; (i) exhibits positive and diminishing marginal product and (iii) has constant return to scale: 1. Y = F(K, L) Given the capital rental price R and the wage w, and the good price P is normalized to 1, the firm can choose K and L to maximize its profit: max F(K,...
1. Consider the production function y = f(L,K) for a firm in a competitive market setting. The price of the output good is p > 0. The prices of the inputs Labour and Capital are w> 0 and r>0 respectively. The firm chooses L and K in order to maximize profits, (L.K). (a) How does the short-run production function differ from the long-run production function? (b) Write out the profit function for the firm, (L,K). (c) Derive the first order...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
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...
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
Question 2: Production Function and Profit Maxi- mization Consider a production function of Cobb-Douglas form: for some α, β E (0, 1) (a) Plot the isoquant of F (b) Derive that technical rate of substitution of F. Does F exhibit diminishing technical rate of substitution? (c) Does F exhibit diminishing marginal productivity of labor? What about marginal (d) Find out the conditions for α and β such that F is increasing return to scale, (e) Suppose that F does not...
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