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1). Suppose that a firm uses inputs labour (L, measured in person hours) and capital (K, measured in machine hours) in...
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...
5. Suppose that an economy has a fixed amount L* of homogeneous labour, and a fixed amount K*of h...
5. Suppose that an economy has a fixed amount L* of homogeneous labour, and a fixed amount K*of homogeneous capital, to be used in producing outputs x and y) In an Edgeworth box having dimensions L and K* in input space, suppose the inputs are the absolute slope of the x isoquant (i.e., the marginal rate of technical substitution) is 1K/2L and the absolute slope of the y' isoquant (i.e., the marginal rate of technical substitution) İs l K/L indicate...
- Julia operates a cost-minimizing firm that produces a single output using labor (L) and capital...
- Julia operates a cost-minimizing firm that produces a single output using labor (L) and capital (K). The firm's production function is Q f(L, K) = min{L, K}}. The per-unit price of labor is w = 1 and the per-unit price of capital is r = 1. Recently, the government imposed a tax on Julia's firm: For each unit of labor that Julia employs, she must pay a tax of £t to the government. (a) Graph the Q unit of...
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....
1. Consider a steel firm that faces a convex isoquant production function where the inputs are...
1. Consider a steel firm that faces a convex isoquant production function where the inputs are labor and capital. The production function yields constant returns to scale. The firm is currently at a cost-minimizing combination of labor and capital for the desired level of output. Suppose the capital used in the production process emits low amounts of polluted wastewater into a nearby river. In order to promote the use of the environmentally friendly capital the government provides a unit subsidy...
Consider a firm whose production is given by Q(K, L) = K^1/2 L^1/2, where K and...
Consider a firm whose production is given by Q(K, L) = K^1/2 L^1/2, where K and L are the quantities of capital and labour production inputs. Prices of capital and labour are both $2 per unit. (a) Suppose that, in the short run, capital is fixed at 4 units. What would be the minimum cost of producing 20 units of output? Illustrate your answer. (b) Now suppose that, in the long run, both capital and labour are variable. What would...
1. Suppose a firm is producing output according to Q=1001KL. A. Draw a sketch of this...
1. Suppose a firm is producing output according to Q=1001KL. A. Draw a sketch of this firm's isoquant map B. What equation do you use to find a cost-minimizing combination of inputs for a certain output level Q.? K C. The marginal products of labor and capital are given by MP, = 50, and L MPK = 50, L respectively. The price of labor is $5 per unit, and the price of K capital is $20 per unit. What is...
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....
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...
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...
5. Suppose that an economy has a fixed amount L* of homogeneous labour, and a fixed amount K*of homogeneous capital, to be used in producing outputs x and y) In an Edgeworth box having dimensions L and K* in input space, suppose the inputs are the absolute slope of the x isoquant (i.e., the marginal rate of technical substitution) is 1K/2L and the absolute slope of the y' isoquant (i.e., the marginal rate of technical substitution) İs l K/L indicate...
- Julia operates a cost-minimizing firm that produces a single output using labor (L) and capital (K). The firm's production function is Q f(L, K) = min{L, K}}. The per-unit price of labor is w = 1 and the per-unit price of capital is r = 1. Recently, the government imposed a tax on Julia's firm: For each unit of labor that Julia employs, she must pay a tax of £t to the government. (a) Graph the Q unit of...
1. Suppose a firm is producing output according to Q=1001KL. A. Draw a sketch of this firm's isoquant map B. What equation do you use to find a cost-minimizing combination of inputs for a certain output level Q.? K C. The marginal products of labor and capital are given by MP, = 50, and L MPK = 50, L respectively. The price of labor is $5 per unit, and the price of K capital is $20 per unit. What is...
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....
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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