Homework Answers
The cost of producing 100 units of output is given as:
C = w*L + r*K
= 7*20 + 20*100 = 2140.
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10. (**) [2 points A firm solves the cost minimization problem and finds the follow- ing:...
15 09. 00 points) Suppose that a firm's cost per unit of labor (w) is $30 per day and its cost per a. Draw the isocost line for a total cost per day of s15,000. (Base case) and Draw the What...
15 09. 00 points) Suppose that a firm's cost per unit of labor (w) is $30 per day and its cost per a. Draw the isocost line for a total cost per day of s15,000. (Base case) and Draw the What are the maximum amount of K and L possibly used to produce 100 units? unit of capital (r) is $50 per day isoquant curve when this firm is producing efficiently, assuming output is 100 units b. If the price...
2. (12 total points) Suppose a firm can use either Capital (K) or Labor (L) in...
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 30 units of output (Q = 30). Using a graph, draw the firm's...
Practice Questions: Firm Cost Minimization The production function of computers takes the following form: Q= K02L...
Practice Questions: Firm Cost Minimization The production function of computers takes the following form: Q= K02L 1. Based on the production function, find MRTS LK a. b. Mathematically show that MRTS,K diminishes as the firm uses more labor. Suppose currently the company uses 3 units of K, and 2 units of L What is MRTS? What does the number tell you? c. Suppose the wage rate W= $8/hour and the rental rate of capital R $4/hour. Write an equation for...
Please help! Show all work and label answers clearly please! Thank you! 2. (12 total points,...
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 can use either Capital (K) or Labor (L) in a production process. The...
Suppose a firm can use either Capital (K) or Labor (L) in a production process. The firms 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 30 units of output (Q = 30). Using a graph, draw the firm’s isoquant for...
2. Consider the following cost minimization problem. A firm minimizes total cost given by, TC =...
2. Consider the following cost minimization problem. A firm minimizes total cost given by, TC = wL+rK subject to an output constraint as given by the production function, y=f(K,L)=8K05 +420S, where TC refers to total cost, L is labor input, K is capital input, r is the price of capital, w is the wage rate, and y is output. a. Derive the factor demand functions and the optimal cost function. The first order conditions and all the steps involved in...
EXERCISE 1 COST MINIMIZATION, PART I Consider a firm with a Cobb-Douglas production function defined by...
EXERCISE 1 COST MINIMIZATION, PART I Consider a firm with a Cobb-Douglas production function defined by the equation Q = 32K0.5 0.25 where Q is output, K the capital input and I the labour input. The prices of both production factors are given to the firm: labour costs w = 32 per unit, capital r = 16 per unit. Imagine that the firm wants to produce 512 units of output at minimum cost. (a) Determine the (unique) stationary point, say...
2. Assume that a firm needs to produce 500 units of output and it has ability...
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...
Please help! Please show all work! 2. (21 points. Suppose a firm's production function is given...
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...
5. Input Inflexlbility and cost minimization The following lsoquants depict the technologically efficient bundles of labor...
5. Input Inflexlbility and cost minimization The following
lsoquants depict the technologically efficient bundles of labor and
capital for producing 100 and units of output
5. Input inflexibility and cost minimization Aa Aa The following isoquants depict the technologically efficient bundles of labor and capital for producing 100 and 150 units of output (labeled q 100, and q150, respectively). Suppose the firm is initially using the cost-minimizing bundle of labor and capital for producing 100 units of output, represented by...
15 09. 00 points) Suppose that a firm's cost per unit of labor (w) is $30 per day and its cost per a. Draw the isocost line for a total cost per day of s15,000. (Base case) and Draw the What are the maximum amount of K and L possibly used to produce 100 units? unit of capital (r) is $50 per day isoquant curve when this firm is producing efficiently, assuming output is 100 units b. If the price...
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 30 units of output (Q = 30). Using a graph, draw the firm's...
Practice Questions: Firm Cost Minimization The production function of computers takes the following form: Q= K02L 1. Based on the production function, find MRTS LK a. b. Mathematically show that MRTS,K diminishes as the firm uses more labor. Suppose currently the company uses 3 units of K, and 2 units of L What is MRTS? What does the number tell you? c. Suppose the wage rate W= $8/hour and the rental rate of capital R $4/hour. Write an equation for...
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...
2. Consider the following cost minimization problem. A firm minimizes total cost given by, TC = wL+rK subject to an output constraint as given by the production function, y=f(K,L)=8K05 +420S, where TC refers to total cost, L is labor input, K is capital input, r is the price of capital, w is the wage rate, and y is output. a. Derive the factor demand functions and the optimal cost function. The first order conditions and all the steps involved in...
EXERCISE 1 COST MINIMIZATION, PART I Consider a firm with a Cobb-Douglas production function defined by the equation Q = 32K0.5 0.25 where Q is output, K the capital input and I the labour input. The prices of both production factors are given to the firm: labour costs w = 32 per unit, capital r = 16 per unit. Imagine that the firm wants to produce 512 units of output at minimum cost. (a) Determine the (unique) stationary point, say...
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...
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...
5. Input Inflexlbility and cost minimization The following
lsoquants depict the technologically efficient bundles of labor and
capital for producing 100 and units of output
5. Input inflexibility and cost minimization Aa Aa The following isoquants depict the technologically efficient bundles of labor and capital for producing 100 and 150 units of output (labeled q 100, and q150, respectively). Suppose the firm is initially using the cost-minimizing bundle of labor and capital for producing 100 units of output, represented by...
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