Question 1 (32 marks) Consider a firm which produces a good, y, using two inputs or factors of production, x1 and...
hi i need answer from part d Question 2 (48 marks) Consider a firm which produces a good, y, using two factors of production, xi and x2 The firm's production function is Note that (4) is a special case of the production function in Question 1, in which α-1/2 and β-14. Consequently, any properties that the production function in Q1 has been shown to possess, must also be possessed by the production function defined in (4). The firm faces exogenously...
Consider a firm which produces a good, y, using two factors of production, xi and x2. The firm's production function is 1/2 1/4 = xi X2. (4) Note that (4) is a special case of the production function in Question 1, in which 1/4 1/2 and B a = Consequently, any properties that the production function in Q1 has been shown to possess, must also be possessed by the production function defined in (4). The firm faces exogenously given factor...
2. Consider the following production function with two inputs X1 and X2. y = x1/2x2/4 a. Derive the equation for an isoquant (assuming X2 is on the y-axis). b. Derive the marginal product of input x1. c. Derive the marginal product of input x2. d. Derive the marginal rate pf technical substitution (MRTS).
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...
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...
3. Consider the following production function with two inputs X1 and x2. y = alnx + Blny a. Derive the equation for an isoquant (assuming x is on the y-axis). b. Derive the marginal product of input x. c. Derive the marginal product of input x. d. Derive the marginal rate pf technical substitution (MRTS).
(d) Let (x1,x) R..9x 2 yo} (3) S is the set of combinations of (x,x2) which produce at least output level yo.Economists refer to S'as the upper contour set associated with output yo. Assume that x (x,x2) S and y (y,y2) S. That is xfx yo and yy z yo. i) Let z (z1,z2) R.. What must be true for ze S? ( mark) ii) Let z= (z1,z2) x +(1A)y where 02<1 Prove that zE S Hint: Using results on...
A producer produces good y using inputs x1 and x2 according to the production function y = xα1xβ2 where α+β < 1. The factor prices are w1 and w2 (for input 1 and 2). The producer can sell as much as he wants at unit price p. A producer produces good y using inputs X1 and 22 according to the production function y = xqx, where a + B < 1. The factor prices are wi and W2 (for input...
5. Let the firm's production function be given by y = x1 + x2. Note that the inputs 21 and 2 are perfect substitutes in this production process. Suppose w = 2 and w2 = 1. (a) Derive the conditional factor/input demands and use them to find the long-run cost function for this firm. (b) For these factor prices, derive the firm's long-run supply curve. (c) For these factor prices graph the firm's long-run supply curve. (d) Suppose the price...
A firm wants to know how to minimize its costs for its new production plant, for any desired level of output. Suppose the production is given by y = f(x1, x2) = 2 x11/2 x21/2, where x1 and x2 are inputs, and the input prices are w1 and w2. i. Sketch the cost minimization problem. Label your axes and graph appropriately. (1 point) ii. Find the optimal choices of x1 and x2. (2 points) iii. Find the cost function. (1...