2. Assume the technology is described by y =(x,x2)i and that prices of inputs are wi and wzrespectively. (a) Find the conditional factor demands for inputs x, and x2
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- Find the elasticity of scale and the elasticity of substitution for the CES production function (x1; x2) = (x1rho + x2tho 1/P, where 0 * p > !!!You decide to sell pairs of running shoes. Assume that the quantity demanded is alinear function of the price. It is known that if you charge $40 per pair of shoes, thenyou will be able to sell 400 pairs of shoes in a month. If you charge $60 per pair ofrunning shos, then you can sell 300 pairs of shoes in a month. It is also known thatyour monthly fixed cost is $100 and pairs of shoes cost $20 per shoe to produce. Findwhat price you should charge for a pair of shoes in order to maximize profit in amonthI A consumer's Marshallian demand for y is given by gy(Pa, Py, I) = —— 3. The price of Py = good y is py 4 and the consumer's income is I = 15. What is ey,py, the consumer's own price elasticity of demand for y? (a) −15 (b) -5 (c) -5/12 (d) −1 (e) -15/16
- Producers of a certain brand of refrigerator will make 1600 refrigerators available when the unit price is $320. Ata unit price of $370, 5600 refrigerators will be marketed. Find the equation relating the unit price p of a refrigerator to the quantity supplied x if the equation is known to be linear How many refrigerators will be marketed when the unit price is s4207 refrigerators What is the lowest price at which a refrigerator will be marketed?The quantity demanded each month of Russo Espresso Makers is 250 when the unit price is $140. The quantity demanded each month is 1000 when the unit price is $110. The suppliers will market 750 espresso makers when the unit price is $76 or higher. At a unit price of $96, they are willing to market 2250 units. Both the supply and demand equations are known to be linear. (a) Find the demand equation. P = (b) Find the supply equation. p= (c) Find the equilibrium quantity and the equilibrium price. units $What is the elasticity of substitution for the production function f(K, L) = K¹/4 [³/4? (a) o = 1 (b) o = -1 (c) o = 1 (d) σ = 3 2
- State the processes performed when demand is predicted to be greater than supply.Input either "increase" or "decrease" where relevant: An increase in the prices of inputs will cause the equilibrium price to ....... and the equilibrium quantity to .....4) Find the elasticity of substitution (o) for the following production functions. a.) q = 10 K0.²L0.8 b.) q = 2 [0.2K-2 + 0.8L¬2 ]-0.5
- It has been mentioned that there should be a match of supply and demand in a company that produces spare parts.Department A can produce parts at a rate of 80/day.Department B uses those parts at the rate of 10/day.Each day unused parts are added to inventory.At what rate does inventory of unused parts buid up?I. Given the production function Q = AK“LF, find the partial derivatives with respect to K and L and give their economic interpretation. (10) Given the demand for beef Qy = 4850 – 5Pp + 1.5 Pp + 0.1 Y, where Y = 10 000 Py = 100, and the price for pork P, = 100. - a) Find the income elasticity of demand for beef? b) Find the cross price elasticity of demand for beef? c) Estimate the A% in demand for beef resulting from a 10% increase in the price for pork?(i) Given the demand functions and the total cost function two goods: X and Y Px 164- &r Py = 81-2y TC = 800+ 4x +y+2xy %3D where x and y are the number of units of goods X and Y respectively Determine the values of x and y for which profit is a maximum. What is the maximum profit? (ii) A production requirement is that 80x + 20y = 640. Find the maximum profit subject of this constraint. Paragraph BIEE D.