if we were told that the estimated production function for a particular brand of gin is:...
if we were told that the estimated production function for a particular brand of gin is: Q = 19.4K0.2370 L0.0682
where Q = millions of bottle of gin
K = units of capital (000)
L = labour hours (000)
assuming the cost of labour (L) is $100 per hour and the cost of capital (K) is $200 per unit, in what ratio must K and L be used in order to produce this gin at the lowest possible cost.
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if we were told that the estimated production function for a
particular brand of gin is:...
QUESTION 10 Acme Eggs produces eggs. Acme has estimated this production function for its eggs: Q...
QUESTION 10 Acme Eggs produces eggs. Acme has estimated this production function for its eggs: Q = 10L".SK.) The marginal product of labor is given by MPL =5L-0.5 K.S and the marginal product of capital is given by MPx=520.5 -0.5 where Q = output measured in eggs, L = labor measured in person hours, and K = capital measured in machine hours. Acme currently pays a wage of $15 per hour and considers the relevant rental price for capital to...
6. A firm's production function is given by q 20(EV2 +K2), where q is output and...
6. A firm's production function is given by q 20(EV2 +K2), where q is output and E and K are amounts of labour and capital, respectively. If the wage rate is w $15 per hour and the price of capital is r $60 per hour, what is the firm's profit maximizing capital/labour ratio? A. K/E 20 D. K/E 4 E. K/E = 16 B. K/E 200 C. K/E 1/2
If I told you the production function that generated the isoquants is Q = 21.5L0.35 K0.5,...
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...
A firm uses labour and capital to produce output according to the production function ??(??, ??) = 4??0.5??0.5, where L...
A firm uses labour and capital to produce output according to the production function ??(??, ??) = 4??0.5??0.5, where L is the number of units of labour and K is the units of capital. The cost of labour is $40 a unit and the cost of capital is $10 a unit. a) On a graph, draw an isocost line for this firm, showing combinations of capital and labour that cost $400 and another isocost line showing combinations that cost $200....
Imagine that the production function for tuna cans is given by q=6K+4L where q = Output...
Imagine that the production function for tuna cans is given by q=6K+4L where q = Output of tuna cans per hour. K = Capital input per hour L = Labor input per hour a) Assuming capital is fixed a K = 6, how much L is required to produce 60 tuna cans per hour? To produce 100 per hour? b) Now assume that capital input is fixed at K = 8 what L is required to produce 60 tuna cans...
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S:...
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S: where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 1 kg of kiwi fruits and 3 hours of labour, he can produce 1 bottle of juice a) Draw isoquants for q, q 2 and q 3 on a diagram with labour on horizontal axis and kiwi fruits on vertical b) Let the price...
1. Consider the following production function: Q = f(K, L) = (K^1/2) (L^1/2) a) Place capital...
1. Consider the following production function: Q = f(K, L) = (K^1/2) (L^1/2) a) Place capital on the vertical axis and labor on the horizontal axis. Determine the marginal rate of technical substitution. b) Suppose that the price of capital is $10, 000, and the price of labor is $10, 000. What is the ratio of capital to labor that allows the firm to produce any given quantity of output as cheaply as possible. c) Suppose that the price of...
Suppose a chair manufacturer's can hire labour for €30 per hour and the rental cost of...
Suppose a chair manufacturer's can hire labour for €30 per hour and the rental cost of capital is є15 per hour. The chair manufacturer's production function is such that a chair can be produced using 4 hours of labour or 4 hours of capital in any combination. (For example it can produce one chair with: 4 hours of labour only; 4 hours (rental) of capital only; or any combination of capital and labour that adds up to 4 hours) 3....
Question 2 A local fast food restaurant pays $5 per hour to workers and $50 per...
Question 2 A local fast food restaurant pays $5 per hour to workers and $50 per hour to rent ovens and other kitchen machinery. The restaurant uses seven hours of worker time per unit of machinery time. a. i. Determine whether the restaurant is minimizing its cost of production when the ratio of ii. Do you suggest any adjustment to improve the efficiency in the resource use? A cosmetic company produces skin cream bottles in its local store. The company...
A firm produces gizmos according to the production function Q =10KL , where Q is the...
A firm produces gizmos according to the production function Q =10KL , where Q is the quantity of gismos produced, K is the quantity of capital rented and L is the quantity of labour hired. The manager has been given a production target: Produce 9,000 gizmos per day. He is informed that the daily rental price of capital is $400 per unit and the wage rate is $200 per day. a) Currently, the firm has 10 units of capital. How...
QUESTION 10 Acme Eggs produces eggs. Acme has estimated this production function for its eggs: Q = 10L".SK.) The marginal product of labor is given by MPL =5L-0.5 K.S and the marginal product of capital is given by MPx=520.5 -0.5 where Q = output measured in eggs, L = labor measured in person hours, and K = capital measured in machine hours. Acme currently pays a wage of $15 per hour and considers the relevant rental price for capital to...
6. A firm's production function is given by q 20(EV2 +K2), where q is output and E and K are amounts of labour and capital, respectively. If the wage rate is w $15 per hour and the price of capital is r $60 per hour, what is the firm's profit maximizing capital/labour ratio? A. K/E 20 D. K/E 4 E. K/E = 16 B. K/E 200 C. K/E 1/2
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...
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S: where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 1 kg of kiwi fruits and 3 hours of labour, he can produce 1 bottle of juice a) Draw isoquants for q, q 2 and q 3 on a diagram with labour on horizontal axis and kiwi fruits on vertical b) Let the price...
Suppose a chair manufacturer's can hire labour for €30 per hour and the rental cost of capital is є15 per hour. The chair manufacturer's production function is such that a chair can be produced using 4 hours of labour or 4 hours of capital in any combination. (For example it can produce one chair with: 4 hours of labour only; 4 hours (rental) of capital only; or any combination of capital and labour that adds up to 4 hours) 3....
Question 2 A local fast food restaurant pays $5 per hour to workers and $50 per hour to rent ovens and other kitchen machinery. The restaurant uses seven hours of worker time per unit of machinery time. a. i. Determine whether the restaurant is minimizing its cost of production when the ratio of ii. Do you suggest any adjustment to improve the efficiency in the resource use? A cosmetic company produces skin cream bottles in its local store. The company...
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