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

See similar textbooks

Similar questions

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.
A firm has a fixed production cost of $1,000 and a constant marginal cost of production of $700 per unit produced. What is the firm's total cost function? O A. TC = 1,000 + (700q) O B. TC = 1,000 + (700q). OC. TC = 700q. O D. TC = 1,000. The firm's average total cost (ATC) of production is O A. ATC = 1,000 + (700q). OB. 1,000 + (700q) ATC = Oc. 1,000 ATC = O D. ATC = 700q. O E. ATC = 700. If the firm wanted to minimize the average total cost, would it choose to be very large or very small? Explain. OA. very small because the average total cost of production rises with output. O B.- very large because the average variable cost of production falls with output. OC. very small because the average fixed cost of production rises with output. O D. very small because the total cost of production rises with output. O E. very large because the average total cost of production falls with output.
4) Suppose that a firm's production function is Q = Lº.4K0.6. The cost of a unit of labor is $8 and the cost of a unit of capital is $12. Write firm's long run cost function. Calculate the slope of isocost line. Calculate marginal rate of technical substitution. d. Suppose firm decides to produce 50 units, what is the cost minimizing combination of these two resources (labor and capital)? a. b. C.
A company has the following production function for its product, f(k, I) = k"/2/1/2. It faces input prices v = 5 for capital and w = 20 for labor. How much does the firm use of each input if it wants to produce 10 units of its product? O a. I= 4, k = 25 O b. / = 5, k = 20 O c. 1= 20, k = 5 O d. 1= 25, k = 4 Clear my choice Suppose the market demand for a good is Qº = 2000 – 8p and market supply is QS = 5p + 700. There are 10 %3D firms with exactly the same cost function. How much does each firm produce? O a. 100 O b. 120 O c. 140 O d. 200 Clear my choice
1. Figure 1 shows the production function of a firm. Y В Y2 Y1 X X1 X2 a) What are the variables along (i) of the X axis? (ii) Y axis? b) Does the firm operate in the short term or long term? c) Referring to the diagram above, what is the level of input where (i) firms experiencing increased marginal output? (i) does the firm experience a declining marginal output? (i) the firm achieves maximum marginal output? (iv) the firm achieves a blank marginal output?
The short run is defined as the period of time: Select one: O a. in which all inputs are fixed O b. in which at least one input is fixed O c. O d. none of the answers provided is correct in which no inputs are fixed
1
3
What is the marginal physical productivity (MPP) of the inputs given the function Q = 18z7 + 2x1#2 + 2x3? Select one: O a. MPP = 36x1 + 2x2 MPP, = 2x1 + 4x2 ОБ. МP, — 36+ 2г2 +2 MPP, = 2x1 + 4x2 %3D %3D O. MPP, 36x1 + 2x1 %3D MPP, = 2x1 + 4x1 %3D O d. MPP MPP, = 2x2 + 4x2 36z1 + 2x1 %3D %3D
1-a Suppose you have following production function for your firm : q = Ax;“x, where x, > 0, x, > 0 and a ± 0, a0. The price of input x, is w>0 and the price of x, is r > 0. a) Compute the marginal products of xi and x2. b) Using Lagrange method, write down cost minimization problem and first order conditions. c) Determine the conditional factor demands and cost function of the firm, x1* x2* and C* as a function of w, r, q and 2.
Consider a production function given by y = min{4L, K}. The price of one unit of Lis $1 and the price of one unit of K is $1. If the firm wishes to produce 16 units of output, how much does it cost the firm? 28 O 24 20 O 32 O 36