A firm’s production function is given by Q = 2K2 + 6L. Does this production function...
Suppose a firm’s production function is given by q = min{3K,6L}, where K is capital and L is labor. If the wage increases, what happens to the firm’s use of labor in production (relative to capital)? Explain.
8. Consider the following production function: Y A(5K +6L). Does this production exhibit constant returns to scale? In other words, does F(OK,bL) bF(K, L) for any b2 Prove or disprove.
A firm has a production function q = KL, where q is the quantity of output, K is the amount of capital and L is the amount of labor. a) Does this production function exhibit increasing, decreasing or constant returns to scale? b) Does the long-run cost function exhibit economies of scale or diseconomies of scale? c) Is the LR Average Cost curve increasing or decreasing with q?
Consider the production function given by Q = l^α + k^α where α > 0. At what values of α does the production technology exhibit increasing, decreasing, or constant returns to scale? Prove your answer!
The production function of the Auto parts firm is given by Q-5L-L, where Q is the units of output and L is the number of labor hours. Each output sells for 100 dollars per unit. The human resources manager estimates that the marginal cost of hiring an extra worker is 50 dollars. How many labor hours should this firm hire? Hint: MPL=5-2 L 1) 2) A frim's production function is given by Q(L)-6L, where Q measures output and L is...
Suppose a firm has a production function given by Q=2K+L, where L is labor, K is capital and Q is the quantity of output. Which of the following statements is WRONG? A. The firm is exhibiting constant returns to scale B. The firm’s marginal product of capital is constant C. The firm’s marginal product of labor is constant D. The firm’s marginal rate of technical substitution depends on the amount of inputs
A firm has the following production function: ?(?1, ?2) = ???{?1, 2?2} A) Does this firm’s technology exhibit constant, increasing, or decreasing returns to scale? B) What is the optimality condition that determines the firm’s optimal level of inputs? C) Suppose the firm wants to produce exactly ? units and that input 1 costs $?1 per unit and input 2 costs $?2 per unit. What are the firm’s conditional input demand functions? D) Using the information from part D), write...
1. A production function is given by f(K, L) = L/2+ v K. Given this form, MPL = 1/2 and MPK-2 K (a) Are there constant returns to scale, decreasing returns to scale, or increasing returns to scale? (b) In the short run, capital is fixed at -4 while labor is variable. On the same graph, draw the 2. A production function is f(LK)-(L" + Ka)", where a > 0 and b > 0, For what values of a and...
A firm has the following production function: ?(?1, ?2) = ?1 + ?2 A) Does this firm’s technology exhibit constant, increasing, or decreasing returns to scale? B) Suppose the firm wants to produce exactly ? units and that input 1 costs $?1 per unit and input 2 costs $?2 per unit. What are the firm’s conditional input demand functions? C) Write down the formula for the firm’s total cost function as a function of ?1, ?2, and ?.
If I told you the production function that generated the isoquants is Q = 21.5L0.35 K0.5, is your answer to question 18 dependent on whether Q is a small number or a large number? The three isoquants in the graph below refer to production levels of 100 (red), 200 (green), and 255 (blue). As long as the quantity of capital (K) and labor (L) used in the production process lies on the line a, whenever is tripled K is also...