Homework Answers
1):-It is true
production function is defined as the relationship between the quantity of inputs a firm uses and the quantity of output it produces.
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If a price taking firm's production function is quasi-concave and exhibits decreasing marginal product with respect...
Problem 4: A firm has the following production function: Xi , X2)=X1 , X2 A) Does this firm's tec...
Problem 4: A firm has the following production function: Xi , X2)=X1 , X2 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in x1. Is the marginal product of input 2 increasing, constant, or decreasing in x2? D) Suppose the firm...
14. Fill in the blank: A concave utility function (one which exhibits decreasing marginal returns tic...
14. Fill in the blank: A concave utility function (one which exhibits decreasing marginal returns tic of A. Risk neutrality C. Risk aversion D. Irrationality E. The endowment effect 18. The Axiom of Independence prevents what pathology of decision making? A. Inability to make a decision of any kind for some choice sets B. Inability to make choices under risk C. Obession with infinitely improbable alternatives D. Neglecting base rates E. Manipulation by framing effects
Problem 3: A firm has the following production function: f(x1,x2) = x7/3x4/3 A) Does this firm's...
Problem 3: A firm has the following production function: f(x1,x2) = x7/3x4/3 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in X1. Is the marginal product of input 2 increasing, constant, or decreasing in xz? D) Suppose the firm wants to...
1. Which of the following statements about production functions is FALSE? a. Included in the firm's...
1. Which of the following statements about production functions is FALSE? a. Included in the firm's short-run production function are both fixed and variable inputs b. Higher amounts of inputs will allow a firm to produce more output c. The production function shows the technical relationship between a firm's inputs and outputs d. The relationship between inputs and outputs changes if capital becomes variable in the long run 2. The law of diminishing marginal product is a statement a. that...
NEED ANSWERS OF PART (f,g,h,j) Problem 2 [21 marks] Consider a firm that uses two inputs. The quantity used of input 1...
NEED ANSWERS OF PART (f,g,h,j)
Problem 2 [21 marks] Consider a firm that uses two inputs. The quantity used of input 1 is denoted by x, and the quantity used of input 2 is denoted by x2. The firm produces and sells one good using the production function f(x1, x2)-4x053x25. The final good is sold at price P $10. The prices of inputs 1 and 2 are w$2 and w2 $3, respectively. The markets for the final good and both...
The phenomenon of marginal product decreasing as employees are added to production is referred to as...
The phenomenon of marginal product decreasing as employees are added to production is referred to as Select one: a. zero economic profit. b. negative returns to scale. c. increasing total product. d. diminishing returns.
The phenomenon of marginal product decreasing as employees are added to production is referred to as...
The phenomenon of marginal product decreasing as employees are added to production is referred to as Select one: a. zero economic profit. b. negative returns to scale. c. increasing total product. d. diminishing returns.
QUESTION 7 The function q= 2K + L exhibits: a. constant returns to scale b. increasing...
QUESTION 7 The function q= 2K + L exhibits: a. constant returns to scale b. increasing returns to scale c. decreasing returns to scale d. any of the above depending on the values for K and L 10 points QUESTION 8 The short run is defined to be the period of time during which: a. at least one input is fixed b. all inputs are variable c. at least one input is variable d. all inputs are fixed 10...
A firm uses two inputs x1 and x2 to produce output y. The production function is...
A firm uses two inputs x1 and x2 to produce
output y. The production function is given by f(x1, x2) = p
min{2x1, x2}. The price of input 1 is 1 and the price of input 2 is
2. The price of output is 10.
4. A firm uses two inputs 21 and 22 to produce output y. The production function is given by f(x1, x2) = V min{2x1, x2}. The price of input 1 is 1 and the price...
1. Let the production function be y = c. (a) Suppose the price of is w...
1. Let the production function be y = c. (a) Suppose the price of is w = 1. Find the firm's total cost curve C(y), average cost curve AC(y), and marginal cost curve MC(y). (b) Assume that p> min AC(y), find the firm's supply curve y(w,p). (c) Suppose the price of y is p = 10, and the price of the input r is w = 1, calculate the firm's profit. 2. Assume the production function is y = 5.3...
Problem 4: A firm has the following production function: Xi , X2)=X1 , X2 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in x1. Is the marginal product of input 2 increasing, constant, or decreasing in x2? D) Suppose the firm...
14. Fill in the blank: A concave utility function (one which exhibits decreasing marginal returns tic of A. Risk neutrality C. Risk aversion D. Irrationality E. The endowment effect 18. The Axiom of Independence prevents what pathology of decision making? A. Inability to make a decision of any kind for some choice sets B. Inability to make choices under risk C. Obession with infinitely improbable alternatives D. Neglecting base rates E. Manipulation by framing effects
Problem 3: A firm has the following production function: f(x1,x2) = x7/3x4/3 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in X1. Is the marginal product of input 2 increasing, constant, or decreasing in xz? D) Suppose the firm wants to...
NEED ANSWERS OF PART (f,g,h,j)
Problem 2 [21 marks] Consider a firm that uses two inputs. The quantity used of input 1 is denoted by x, and the quantity used of input 2 is denoted by x2. The firm produces and sells one good using the production function f(x1, x2)-4x053x25. The final good is sold at price P $10. The prices of inputs 1 and 2 are w$2 and w2 $3, respectively. The markets for the final good and both...
A firm uses two inputs x1 and x2 to produce
output y. The production function is given by f(x1, x2) = p
min{2x1, x2}. The price of input 1 is 1 and the price of input 2 is
2. The price of output is 10.
4. A firm uses two inputs 21 and 22 to produce output y. The production function is given by f(x1, x2) = V min{2x1, x2}. The price of input 1 is 1 and the price...
1. Let the production function be y = c. (a) Suppose the price of is w = 1. Find the firm's total cost curve C(y), average cost curve AC(y), and marginal cost curve MC(y). (b) Assume that p> min AC(y), find the firm's supply curve y(w,p). (c) Suppose the price of y is p = 10, and the price of the input r is w = 1, calculate the firm's profit. 2. Assume the production function is y = 5.3...
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