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QUESTION 6 1 poin Production. A firm uses capital and labour to produce output according to...
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....
A cost-minimising firm produces output (q) using capital and labour as productive inputs. If, at the...
A cost-minimising firm produces output (q) using capital and labour as productive inputs. If, at the cost-minimising quantities of capital and labour, the marginal rate of technical substitution (of K for L, with labour on the horizontal axis) is -2, and the wage rate for labour is $5 per hour, what is the rental rate for capital in dollars? a) $0.50 b) $1 c) $2.50 d) $10 e) There is not enough information to answer this question.
1). Suppose that a firm uses inputs labour (L, measured in person hours) and capital (K, measured in machine hours) in...
1). Suppose that a firm uses inputs labour (L, measured in person hours) and capital (K, measured in machine hours) in the production of its output (Q) according to the production function Q min{2L, 3K} (a) Draw the isoquant line associated with 12 units of output. Measure K along the vertical axis and L along the horizontal axis. (b) Suppose that the price of labour is $2/person hour, and the price of capital is $4 / person hour. What is...
The Pontiac Assembly is a factory which uses labour and capital to build trucks according to...
The Pontiac Assembly is a factory which uses labour and capital to build trucks according to the technology f(L,K) = 4LK: During a war, the government demands that the Pontiac Assembly produces 2 trucks for the military this year. The factory is currently renting 1 units of capital. Due to various limitations, the amount of capital the factory uses cannot be changed. The wage paid for each unit of labour is 6 and rent for each unit of capital is...
A firm uses two inputs x1 and x2 to produce output y. The production function is...
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...
Consider the production function given by y = f(L,K) = L^(1/2) K^(1/3) , where y is...
Consider the production function given by y = f(L,K) = L^(1/2) K^(1/3) , where y is the output, L is the labour input, and K is the capital input. (a) Does this exhibit constant, increasing, or decreasing returns to scale? (b) Suppose that the firm employs 9 units of capital, and in the short-run, it cannot change this amount. Then what is the short-run production function? (c) Determine whether the short-run production function exhibits diminishing marginal product of labour. (d)...
[Short-Run Production] Suppose that a firm is producing in the short run with output given by:...
[Short-Run Production] Suppose that a firm is producing in the short run with output given by: Q = 200.5L – 2.5L2, The firm hires labor at a wage of $25 per hour and sells the good in a competitive market at P = $50 per unit. Find the firm’s optimal use of labor and associated level of output. (For extra practice, what is the firm’s associated profit?) I have already finished and went to check my work on Chegg and...
A firm uses capital and labor to produce output according to the production q = 4VLK...
A firm uses capital and labor to produce output according to the production q = 4VLK (a) Find the marginal product of labor (MPL) and marginal product of capital (MPK). (b) If the wage w=$1/labor-hr. and the rental rate of capital r-$4/machine-hr., what is the least expensive way to produce 16 units of output? (c) What is the minimum cost of producing 16 units? (d) Show that for any level of output, q, the minimum cost of producing q is...
1. Suppose that, for the production process for quarks, labour and capital are gross complements. Using...
1. Suppose that, for the production process for quarks, labour and capital are gross complements. Using isoquant / isocost analysis, illustrate how the long-run quantity-demanded for labour would be affected by a decrease in the cost of capital. Illustrate both the “substitution effect” and the “scale effect.” 2. Suppose capital and labour are perfect substitutes for producing widgets and that it takes 1 unit of capital or 3 units of labour to produce one widget. If the price of labour...
A firm uses labor L to produce output Q, using a production function Q = 2L....
A firm uses labor L to produce output Q, using a production function Q = 2L. The cost of L is $10 per unit. If the firm needs to produce exactly 200 units of Q, what will this cost?
A cost-minimising firm produces output (q) using capital and labour as productive inputs. If, at the cost-minimising quantities of capital and labour, the marginal rate of technical substitution (of K for L, with labour on the horizontal axis) is -2, and the wage rate for labour is $5 per hour, what is the rental rate for capital in dollars? a) $0.50 b) $1 c) $2.50 d) $10 e) There is not enough information to answer this question.
1). Suppose that a firm uses inputs labour (L, measured in person hours) and capital (K, measured in machine hours) in the production of its output (Q) according to the production function Q min{2L, 3K} (a) Draw the isoquant line associated with 12 units of output. Measure K along the vertical axis and L along the horizontal axis. (b) Suppose that the price of labour is $2/person hour, and the price of capital is $4 / person hour. What is...
The Pontiac Assembly is a factory which uses labour and capital to build trucks according to the technology f(L,K) = 4LK: During a war, the government demands that the Pontiac Assembly produces 2 trucks for the military this year. The factory is currently renting 1 units of capital. Due to various limitations, the amount of capital the factory uses cannot be changed. The wage paid for each unit of labour is 6 and rent for each unit of capital is...
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...
A firm uses capital and labor to produce output according to the production q = 4VLK (a) Find the marginal product of labor (MPL) and marginal product of capital (MPK). (b) If the wage w=$1/labor-hr. and the rental rate of capital r-$4/machine-hr., what is the least expensive way to produce 16 units of output? (c) What is the minimum cost of producing 16 units? (d) Show that for any level of output, q, the minimum cost of producing q is...
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