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7. (5 points) There are two firms X and Y. Firm X produces goods x and Firm Y produces goods y. T...
3. Yasmin (Y) and Xavier (X) run firms that produce goods using capital (K) and labor...
3. Yasmin (Y) and Xavier (X) run firms that produce goods using capital (K) and labor (L). They each have technologies such that the Marginal Product of Capital is given by L (the amount of labor hired by the firm) and the Marginal Product of Labor is given by K (the amount of capital used by the firm). Thus, for Yasmin, the marginal rate of technical substitution for her firm is given by where the subscript indicates that this is...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...
Consider two firms, X and Y in the same industry who use the same production technology....
Consider two firms, X and Y in the same industry who use the same production technology. To produce the same level of output, say 1000 pairs of bars, X uses more capital than Y and Y uses more labor than X. Suppose both companies pay the same wage to their employees: w = 15: (Unless otherwise stated, assume that all firms choose their input levels optimally) (a) Which company is paying a lower rent? Why? & Which company has a...
1-Home produces 2 goods X and Y . Home country has two factors of production, Labor...
1-Home produces 2 goods X and Y . Home country has two factors of production, Labor and Capital. All consumers at Home have preferences over two goods that can be represented by the utility function U(X,) =XY . The factor requirements per unit of output of the two goods are also fixed and they are shown in the following table: Good X Good Y Labour 1/3 2/3 Capital 2/3 1/3 Home country has 360 units of Labour and 600 units...
Question 2: Firms Consider a firm that produces output Y from capital K and labour N...
Question 2: Firms Consider a firm that produces output Y from capital K and labour N using the production iechoolopy Y KNdThe f's capital endowcnt is piven as K 50 Labour is hired to maximize profits. At a wage rate w, the firm's labour costs are wN The firm's profit (as a function of N is therefore 1. Find the firm's labour demand function by maximizing profits and solving the fist order condition for the wage rate w. 2. Plot...
3. (5 points) Consider a manufacturing company whose daily production output (number of daily produced goods)...
3. (5 points) Consider a manufacturing company whose daily production output (number of daily produced goods) is described by the Cobb-Douglas production function 20x1/2,1/2, where x is the number of units of labour (number of working hours) and y is the number of units expended on capital (number of machine hours). A unit of labour costs $10 (hourly wage is $10) and a unit of capital costs $40 (cost per machine hour is $40). (a) (2 points Assume that the...
For the following total profit function of a firm, where X and Y are two goods...
For the following total profit function of a firm, where X and Y are two goods sold by the firm: Profit = 170X – 5X2 –XY -4Y2 +175Y -225 Do problem with a constraint of X + Y =30. To work problem 5 use the constraint equation to find an equation for X in terms of Y (X = 30 – Y) or an equation for Y in terms of X. Substitute the equation into the total profit equation at...
The company produces two types of goods in quantities of x and y, with market prices...
The company produces two types of goods in quantities of x and y, with market prices of 40$ and 80$ , respectively. If the production cost is given by function C(x, y) = 2.x2 + 5y2 + 120 and is not exceeding 250 $ what is the maximum profit obtained?
13. Use the following information to answer the question. There are three firms (total) in an...
13. Use the following information to answer the question. There are three firms (total) in an economy: X, Y, and Z. Each firm produces goods that may be used for consumption or as an input in the production process. Firm X buys $100 worth of goods from Y, and $200 worth of goods from firm Z and produces 200 units of output at S5 per unit. Firm Y buys $100 worth of goods from firm X, and $300 worth of...
Question 2 Consider an economy with two firms and a government. Firm 1 produces 10000 units...
Question 2 Consider an economy with two firms and a government. Firm 1 produces 10000 units of good X, which it sells for $20 per unit. It uses this revenue to pay $140000 in wages, $10000 in taxes, and $10000 in interest on a loan, with the rest as profits. Firm 1 sells some of its output to consumers, and some to Firm 2 as an intermediate good in their production process. Firm 2 uses good X as an input...
3. Yasmin (Y) and Xavier (X) run firms that produce goods using capital (K) and labor (L). They each have technologies such that the Marginal Product of Capital is given by L (the amount of labor hired by the firm) and the Marginal Product of Labor is given by K (the amount of capital used by the firm). Thus, for Yasmin, the marginal rate of technical substitution for her firm is given by where the subscript indicates that this is...
Consider a competitive firm that produces bots. Labor (L) and capital (K) are the only two inputs of production; each unit of labor is paid the market wage (w), and each unit of capital is rented at the rental price of capital (r). Output (Y) is therefore a function of labor and capital, or Y = f (K, L), and is sold at the market price (P). The goal of this firm is to maximize profit given the price of...
Question 2: Firms Consider a firm that produces output Y from capital K and labour N using the production iechoolopy Y KNdThe f's capital endowcnt is piven as K 50 Labour is hired to maximize profits. At a wage rate w, the firm's labour costs are wN The firm's profit (as a function of N is therefore 1. Find the firm's labour demand function by maximizing profits and solving the fist order condition for the wage rate w. 2. Plot...
3. (5 points) Consider a manufacturing company whose daily production output (number of daily produced goods) is described by the Cobb-Douglas production function 20x1/2,1/2, where x is the number of units of labour (number of working hours) and y is the number of units expended on capital (number of machine hours). A unit of labour costs $10 (hourly wage is $10) and a unit of capital costs $40 (cost per machine hour is $40). (a) (2 points Assume that the...
The company produces two types of goods in quantities of x and y, with market prices of 40$ and 80$ , respectively. If the production cost is given by function C(x, y) = 2.x2 + 5y2 + 120 and is not exceeding 250 $ what is the maximum profit obtained?
13. Use the following information to answer the question. There are three firms (total) in an economy: X, Y, and Z. Each firm produces goods that may be used for consumption or as an input in the production process. Firm X buys $100 worth of goods from Y, and $200 worth of goods from firm Z and produces 200 units of output at S5 per unit. Firm Y buys $100 worth of goods from firm X, and $300 worth of...
Question 2 Consider an economy with two firms and a government. Firm 1 produces 10000 units of good X, which it sells for $20 per unit. It uses this revenue to pay $140000 in wages, $10000 in taxes, and $10000 in interest on a loan, with the rest as profits. Firm 1 sells some of its output to consumers, and some to Firm 2 as an intermediate good in their production process. Firm 2 uses good X as an input...
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