Homework Answers
Given that PL is 20 and maximum L at horizontal intercept of isocost line is 10. This shows that the cost is 20*10 = $200. Hence the price of capital is 200/8 = $25. Now MRTS = w/r = 20/25 or 4/5. MRTS = MPL/MPK = 4/5. But we are asked to find the relative productivity ratio of capital to labor which is MPK/MPL. Hence we have MPK/MPL = 5/4
Select 5/4
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K Isoquant: Q 70 Tangency 8 Isocost: TC - $? 10 Figure 1. Isoquant and Isocost Price of L = $20; Price of K ? ; TC ? Re...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L = $20; Price of K = ?; TC = ? 1...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L = $20; Price of K = ?; TC = ? 14. Refer to Figure 1. The intercept of the isocost on k axis is 10 15 20 33.33 Refer to Figure 1. When total cost is minimized for producing Q=70, the relative productivity ratio of capital to laboris O 2/1 1/2 4/5 5/4 17. Refer to Figure 1. It is observed that the...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L - $20; Price of K = ? : TC = ? 14. Refer to Figure 1. The intercept of the isocost on Kaxis is 10 15 20 33.33 O 33.33 Question 15 1 pts Refer to Figure 1. When total cost is minimized for producing Q=70, the relative productivity ratio of capital to laboris 0 2/1 1/2 4/5 5/4 Question 16 1 pts...
K Isoquant: Q 70 Tangency 8 Isocost: TC - $? 10 Figure 1. Isoquant and Isocost...
K Isoquant: Q 70 Tangency 8 Isocost: TC - $? 10 Figure 1. Isoquant and Isocost Price of L = $20; Price of K ? ; TC ? 16. Refer to Figure 1. If the price of capital increases while the price of labor is unchanged, which of the following is most accurate? In the new cost-minimizing input combination for producing Q-70, the labor input must be lower than 6. The isoquant of Q = 70 shifts inward. It is...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L = $20; Price of K = ?;TC = ? 14. R...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L = $20; Price of K = ?;TC = ? 14. Refer to Figure 1. The intercept of the isocost on Kaxis is 10 O 15 20 O 33.33
1 pts Question 10 Which of the following is most accurate about an isoquant? O The isoquant of a higher level of o...
1 pts Question 10 Which of the following is most accurate about an isoquant? O The isoquant of a higher level of output is always shown closer to the origin. 0 Anoutput level Q can only be produced by input combinations on its isoquant The isoquants of two different output levels cannot cross each other in the short run, but in the long run they may cross None of the above is correct. 1 pts Question 11 11. Which of...
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. (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...
12. When the total cost is minimized for producing output Q. at the input combination selected, the slope of the isocos...
12. When the total cost is minimized for producing output Q. at the input combination selected, the slope of the isocost is equal to the slope of the isoquant the Marginal Rate of Technical Substitution (MRTSLK) equals the input ratio of Land K. the productivity ratio of labor and capital equals their total-cost ratio. all of the above are correct
1. Consider the figure below illustrating an isoquant and isocost line for the ABC Fruit Company's...
1. Consider the figure below illustrating an isoquant and isocost line for the ABC Fruit Company's production of guavas: x 6 a. [2 pts] Given the isocost line shown above, if the wage rate (w) is 2 and total cost is 12, what is the price of capital, r? b. [5 pts) Suppose that the marginal product of labor (MPL) = 6 and the marginal product of capital (MPK) = 3 at point A in the figure. At point B,...
1. Suppose the production of digital cameras is characterized by the production function q F(K, L)- KL (MPL = K, MPK = L), where q represents the number of digital cameras produced. Suppose that...
1. Suppose the production of digital cameras is characterized by the production function q F(K, L)- KL (MPL = K, MPK = L), where q represents the number of digital cameras produced. Suppose that the price of labor is $10 per unit and the price of capital is S1 per unit. (a) Graph the isoquant for q-121 000. (b) On the graph you drew for part a), draw several isocost lines including one that is tangent to the isoquant you...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L = $20; Price of K = ?; TC = ? 14. Refer to Figure 1. The intercept of the isocost on k axis is 10 15 20 33.33 Refer to Figure 1. When total cost is minimized for producing Q=70, the relative productivity ratio of capital to laboris O 2/1 1/2 4/5 5/4 17. Refer to Figure 1. It is observed that the...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L - $20; Price of K = ? : TC = ? 14. Refer to Figure 1. The intercept of the isocost on Kaxis is 10 15 20 33.33 O 33.33 Question 15 1 pts Refer to Figure 1. When total cost is minimized for producing Q=70, the relative productivity ratio of capital to laboris 0 2/1 1/2 4/5 5/4 Question 16 1 pts...
K Isoquant: Q 70 Tangency 8 Isocost: TC - $? 10 Figure 1. Isoquant and Isocost Price of L = $20; Price of K ? ; TC ? 16. Refer to Figure 1. If the price of capital increases while the price of labor is unchanged, which of the following is most accurate? In the new cost-minimizing input combination for producing Q-70, the labor input must be lower than 6. The isoquant of Q = 70 shifts inward. It is...
Isoquant: Q = 70 Tangency Isocost: TC = $? Figure 1. Isoquant and Isocost Price of L = $20; Price of K = ?;TC = ? 14. Refer to Figure 1. The intercept of the isocost on Kaxis is 10 O 15 20 O 33.33
1 pts Question 10 Which of the following is most accurate about an isoquant? O The isoquant of a higher level of output is always shown closer to the origin. 0 Anoutput level Q can only be produced by input combinations on its isoquant The isoquants of two different output levels cannot cross each other in the short run, but in the long run they may cross None of the above is correct. 1 pts Question 11 11. Which of...
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...
12. When the total cost is minimized for producing output Q. at the input combination selected, the slope of the isocost is equal to the slope of the isoquant the Marginal Rate of Technical Substitution (MRTSLK) equals the input ratio of Land K. the productivity ratio of labor and capital equals their total-cost ratio. all of the above are correct
1. Consider the figure below illustrating an isoquant and isocost line for the ABC Fruit Company's production of guavas: x 6 a. [2 pts] Given the isocost line shown above, if the wage rate (w) is 2 and total cost is 12, what is the price of capital, r? b. [5 pts) Suppose that the marginal product of labor (MPL) = 6 and the marginal product of capital (MPK) = 3 at point A in the figure. At point B,...
1. Suppose the production of digital cameras is characterized by the production function q F(K, L)- KL (MPL = K, MPK = L), where q represents the number of digital cameras produced. Suppose that the price of labor is $10 per unit and the price of capital is S1 per unit. (a) Graph the isoquant for q-121 000. (b) On the graph you drew for part a), draw several isocost lines including one that is tangent to the isoquant you...
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