2. A firm has the production function y=4z1 +10z2. Input prices are w₁ = 5 and w₂ = 6.a) What is the cost minimizing input bundle?

Detailed explanation:y = 4z1 +10z2 ; w1 = 5 ; w2 = 6. Case 1:- If MPz1 / w1 > MPz2 / w2 [ Use z1…

Answered: 2. A firm has the production function…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Trapper Joe, the fur trader, has found that his production function in acquiring pelts is given by q = 2pH where q =the number of pelts acquired in a day, and H =the number of hours Joeís employees spend hunting and trapping in one day. Joe pays his employees $8 an hour. a) Calculate Joeís total and average cost curves (as a function of q). b) What is Joeís total cost for the day if he acquires four pelts? Six pelts? Eight pelts? What is Joeís average cost per pelt for the day if he acquires four pelts? Six pelts? Eight pelts? c) Graph the cost curves from part a and indicate the points from part b.
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2. A firm has the production function y=4z1 +10z2. Input prices are w₁ = 5 and w₂ = 6. a) What is the cost minimizing input bundle?