2 Suppose a firm's production function is f(x₁x₂) = x1/4x2/4, the price for output is p; and the prices for the inputs are w₁ = 1 and w₂ = 2. When input 2 is fixed at ₂. The short-run factor demand function x₁(p.x₂) for input 1 is_ and the optimal output is___. O A O B OC x ()+x (ix= ¯¯

2 Suppose a firm's production function is f(x₁x₂) = x1/4x2/4, the price for output is p; and the prices for the inputs are w₁ = 1 and w₂ = 2. When input 2 is fixed at ₂. The short-run factor demand function x₁(p.x₂) for input 1 is_ and the optimal output is___. O A O B OC x ()+x (ix= ¯¯

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm's production function is Q = 100L.0 K-4. The firm's input prices are PL = $40 and PK = $30. The firm wishes to produce Q = 3,000 units of output and minimize the cost of production. How much labor (L) should the firm employ? O A. L=20.96. O B. L=31.45. O C. L=34.26. O D. L=38.45. O E. L=41.22. QUESTION 2 A firm estimates its production function as Q = -2.4 + 20*L -.5*L2 + 30*K -1.00*K2 + 15*F -.3*F2. Total cost is TC = $2*L + $2.5*K + $1.75*F. The firm wishes to produce 400 units of output. Use Excel to find the cost minimizing amounts of L, K and F. How much F (Fuel) should the firm use? O A. F=7.90. O B. F=9.58. O C. F=10.75. O D. F=12.63. O E. F=14.88.
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