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5. Suppose that your production function is q = K + L. If the firm is able to buy all the capital and labor it wants at...
Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and Q is quantity. If capital is fixed at 4 in the short run. What is the short run production function? A. Q=2L B. Q=8L C. Q=2K D. Q=8K
Suppose a firm has the production function: Q=2KL, where K is capital, L is labor and Q is quantity. If capital is fixed at 4 in the short run. Suppose the cost of a unit of capital is $2 (r=2), and the cost of a unit of labor is $4 (w=4). What is the short run total cost function in terms of Q? A. TC=4+Q B. TC=4+0.5Q C. TC=8+Q D. TC=8+0.5Q
7. Suppose a firm's production function is Q-min(L,K). (This means the level of O produced is the smaller of L and K) a. Graph some isoquants for this firm. b. Let w = 2, r= 1, and suppose the firm's expenditures are C-12. What are the firm's demands for L and K? What is the share of labor in the cost of output? c. Now let w rise to 3. What are the firm's new demands for L and K?...
Suppose a firm has a production function given by Q=2K+L, where L is labor, K is capital and Q is the quantity of output. Which of the following statements is WRONG? A. The firm is exhibiting constant returns to scale B. The firm’s marginal product of capital is constant C. The firm’s marginal product of labor is constant D. The firm’s marginal rate of technical substitution depends on the amount of inputs
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
Suppose a firm has the production function: Q = 2KL, where K is capital, Lis labor and Q is quantity. If capital is fixed at 4 in the short run. Suppose the cost of a unit of capital is $1 (r=1), and the cost of a unit of labor is $4 (w=4). What is the short run total cost function in terms of Q? OTC = 8+Q OTC = 8+0.5Q OTC = 4+ 0.5Q OTC = 4+Q Question 9 (1...
Suppose that the production function for your firm is given by: F(L,K)=L12K1/2 w=$1 and r=$1. In the long-run, how many workers and capital should you hire in order to produce Q units of output? Select one: a. L=2Q; K=Q b. L=Q; K=Q2 c. L=0.5Q; K=0.5Q d. L=Q; K=Q e. None of the above
9. Suppose the firm's production function is given by f(K,L) min (K",L" (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at R = 10,000 and a =. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K, L) = KLi. Let...
2. Suppose that the price of labor is $20 (w = $20) and the price of capital is $40 (r = $40). A firm is able to pay the total cost of $200 to employ labor (L) and capital (K). The firm's production function is given as Q = LK, where Q is units of output, L is units of labor, and K is units of capital. (a) Construct the firm's isocost function and graph it on a two-dimensional plane....
1. There is a furniture manufacturer using labor (L) and capital (K) to produce tables. Its production function is given by q= 10L^.75 K^.40. It pays a wage of $5 per hour and rents capital at a rate of $15. The firm wants to find the cost-minimizing bundle of inputs to produce 10,000 tables. Assume K is on the y-axis in what follows. Write out the firm’s cost function. Calculate the firm’s isocost equation. What is the slope of the...