20. You are given the following short-run production function for the firm: Q=24L-(0.01)(L²), where L=number of workers hired per day, Q = output per day. The firm is a perfect competitor in both the output &input (i.e. labour) markets. The price of output is $10.00 per unit and labour costs $20.00 per day, thenumber of workers hired per day by the firm will be:A) 100G) 1000B) 200H) 110021-24. The demand and supply of spam is given by:Demand:P=100-2QC) 400I) 1300A) 1/3G) 2/7Supply:P = 40 + QWhere P is the price in dollars and Q is the quantity in units. Initially, the market is in equilibrium at Q-20,P=$60. Questions 21 through 24 refer to this market for spam.21. In equilibrium the elasticity of supply and the elasticity of demand are:B) Es= 1.5, ED = 1.0A) Es=1.0, ED = 1.0D) Es= 3.0, ED = 1.0G) Es=2.5, ED = 1.5E) Es=1.0, ED = 1.5H) Es= 3.0, ED = 1.5J) None of the aboveB) $228H) $154D) 600E) 800J) None of the above22. Suppose that a $12 per unit tax is placed on buyers. The share of the tax borne by sellers will be:B) 2/3D) 1/4E) 1/5F) 1/6H) 0J) None of the above23. The total tax revenue raised will be:A) $240C) $216G) $168D) OC) ½I) 1B) $8H) $21624. The excess burden of the tax will be:A) $16C) $32I) OG) $144C) Es=2.5, ED = 1.0F) Es= 1.5, ED = 1.5I) Must be equal in equilibriumF) 900E) $192D) $204J) None of the above.E) $48D) $24J) None of the aboveF) $180F) $128

GivenShort-run production function: The firm is in the perfectly competitive market (in both labor…

20. You are given the following short-run production function for the firm: Q-241-(0.01)(L2), where L= number of workers hired per day, Q-output per day. The firm is a perfect competitor in both the output & input (i.e. labour) markets. The price of output is $10.00 per unit and labour costs $20.00 per day, the number of workers hired per day by the firm will be: A) 100 G) 1000 B) 200 H) 1100 C) 400 1) 1300 E) 800 D) 600 J) None of the above F) 900

20. You are given the following short-run production function for the firm: Q-241-(0.01)(L2), where L= number of workers hired per day, Q-output per day. The firm is a perfect competitor in both the output & input (i.e. labour) markets. The price of output is $10.00 per unit and labour costs $20.00 per day, the number of workers hired per day by the firm will be: A) 100 G) 1000 B) 200 H) 1100 C) 400 1) 1300 E) 800 D) 600 J) None of the above F) 900

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Consider a price-taking firm whose production function is given by q = 3 L1/5 K1/9 where L and K…

A: The production cost per unit, or Average cost, is determined by dividing the entire amount by the…

Q: 1. (.. .-, The Zany Florist is a firm operating in the florist industry in Toronto, Ontario…

A: Introduction Here production function of Zany has given. a) The production function of Zany is y =…

Q: The Brain Bucket Company (BBC) produces helmets for winter sports. It has production facilities in…

A: Given,The production function for the Toronto facility is-The production function for the Winnipeg…

Q: Suppose that a production function F(L, K) is homogeneous of degree 3, and that the long run output…

A: It is given that production function is homogenous of degree 3 .And , we have to proove that it…

Q: 2. Consider a representative firm that aims at maximizing its profit by choosing the real wage (w),…

A: A profit function, in basic terms, is a mathematical expression revealing a business's profit by…

Q: A local coffee shop has the following production function of cups of coffee, ? = ?3/4?1/2. The firm…

A: The answer to the question is as follows :

Q: Suppose that the total cost of manufacturing r units of a certain commodity is C(x) = 2r + 6.r + 12.…

A: Note: We will answer the first one as the exact one was not specified. Please submit a new question…

Q: 1) Consider a company that outputs 1,000 doohickies. The company's long-run production function is:…

A: Answer;

Q: Consider a price-taking firm whose production function is given by q = 3 (L-9)1/5 (K-5)1/9 where…

A: According to the production function, for zero output, the firm has to atleast employ 9 units of…

Q: 3: Suppose a firm's production function is q = 2L+5K, the wage is w = 4, and the rental rate of…

A: Cost function is a mathematical equation that estimates the cost of a product given the price of its…

Q: Suppose in a purely competitive product market, price is $10. If a firm's production function is…

A: Given production function Q=L0.4K0.6 .........(1) Let w be the wage rate and r is cost of…

Q: A firm has a production function Q in function of K and L that can be written as follows: Q = 2/K/L…

A: Here, we have Production function, Q=2KL or Q=2K0.5L0.5 Rental rate of a unit of capital is given…

Q: Consider the following production function: q=100L0.8K0.4 Currently the wage rate (w) is $30.00 and…

A: A production function is a mathematical relationship that explains how inputs (factors of…

Q: Question 10 Consider a firm whose cost function when both L and K are variable is shown in the…

A: Total cost: It refers to the total cost incurred while producing the commodity.Marginal Cost: It…

Q: Consider the short run production function of the firm q = 1414.21 L.5 where capital is held…

A: The marginal cost is the change in the total cost that comes from producing one additional unit of…

Q: A firm has a production function Q in function of K and L that can be written as follows: Q = 2/K/L…

A: The production function is a model that expressed the relationship between inputs (like labor and…

Q: The firm depicted in the graph below was originally producing its output using the mix of inputs at…

A: The factors of production is the factors used to create the product in the market. In this case,…

Q: 3. If MPL = 5L¹/³ is a firm's marginal-product function, where L is the single input labor and…

A: MPL=5L13Now,Production function=Total product of labor(TPL)We…

Q: Consider a price-taking firm whose production function is given by q=3 (L-9) 1/5 (K-5) 1/9 where L…

Q: Assume a firm has the following short-run production function: ) they would employ? ), what is the…

A: The change in q(output) due to the change in l(labor) is measured by MPL(marginal product of labor).…

Q: Month (m): 4 Day (d): 1 Use the two numbers…

A: Fixed cost is that cost which are not depend on the quantity. It's remains same at any output level.…

Q: Assume a firm's short-run cost function is given by the following expression: C(q) = 2+q+q2 If the…

A: The producer is in equilibrium at the point when MC=MR, at this point the value of producing an…

Q: 9. A firm has the following production function, Q = Q(K, L) = K²+L², where Q is output, and K…

A: We are going to find the optimal profit and implication of wage rate on profit to answer this…

Q: Consider a firm with production function in the Cobb-Douglas form q = K^.5L^.5 Suppose that one…

A: It is given that q=k0.5L0.5r=12.5 , w=8 q=2

Q: 1/3 1/3 Bridget's Widgets produces widgets with the production function, y=x1 x2, where x1 is the…

A: Production function: y=x11/3x21/3 ..... (1)Here x1 and x2 denote quantity of labor and…

Q: c) Give a formal definition of increasing, decreasing, and constant returns to sale, and determine…

A: Increasing Returns to Scale Increasing our inputs by m increases our output by more than m. Constant…

Concept explainers

Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?

Question

20. You are given the following short-run production function for the firm: Q=24L-(0.01)(L²), where L=
number of workers hired per day, Q = output per day. The firm is a perfect competitor in both the output &
input (i.e. labour) markets. The price of output is $10.00 per unit and labour costs $20.00 per day, the
number of workers hired per day by the firm will be:
A) 100
G) 1000
B) 200
H) 1100
21-24. The demand and supply of spam is given by:
Demand:
P=100-2Q
C) 400
I) 1300
A) 1/3
G) 2/7
Supply:
P = 40 + Q
Where P is the price in dollars and Q is the quantity in units. Initially, the market is in equilibrium at Q-20,
P=$60. Questions 21 through 24 refer to this market for spam.
21. In equilibrium the elasticity of supply and the elasticity of demand are:
B) Es= 1.5, ED = 1.0
A) Es=1.0, ED = 1.0
D) Es= 3.0, ED = 1.0
G) Es=2.5, ED = 1.5
E) Es=1.0, ED = 1.5
H) Es= 3.0, ED = 1.5
J) None of the above
B) $228
H) $154
D) 600
E) 800
J) None of the above
22. Suppose that a $12 per unit tax is placed on buyers. The share of the tax borne by sellers will be:
B) 2/3
D) 1/4
E) 1/5
F) 1/6
H) 0
J) None of the above
23. The total tax revenue raised will be:
A) $240
C) $216
G) $168
D) O
C) ½
I) 1
B) $8
H) $216
24. The excess burden of the tax will be:
A) $16
C) $32
I) O
G) $144
C) Es=2.5, ED = 1.0
F) Es= 1.5, ED = 1.5
I) Must be equal in equilibrium
F) 900
E) $192
D) $204
J) None of the above.
E) $48
D) $24
J) None of the above
F) $180
F) $128

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:

VIEW

Step 2: Determine marginal revenue product:

VIEW

Step 3: Determine the optimal number of workers hired per day:

VIEW

Solution

VIEW

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Consider a competitive firm whose Cobb-Douglas production function is f (x1, x2) where x1 denotes the amount of labor and x2 denotes the amount of capital. Suppose that the amount of capital is fixed in the short run at 2 = 100. Let the hourly wage rate be wi = $20, the capital rental rate w2 = $30 and the price of the firm's product p = $100. (a) Are the returns to scale increasing, constant or decreasing? Explain you assertion. (b) What is the short-run marginal cost function? (c) What is the average variable cost function of this firm? (d) What is the short-run output of this firm? (e) Will the firm continue to operate in the long run? Explain your assertion.
7. A firm's production function takes the form: Q (L, K) = min {4L, K}, where Q represents output and L and K represent labour and capital, respectively and where w and r give the prices of labour and capital. What would be the expression for the firm's marginal costs? W 4 (b) MC = r + 4w (a) MC = r + (c) MC = (d) MC = W W+4r WK 4 + 4r W+4r +rk (e) MC = Q Q ( x + r) 4
Consider a purely competitive firm that has two variable inputs L (labor hour) and K (machine) for production. The price of product is $p. The production function is Q (K; L) = 4L^1/4 K^1/4 . Assume that the hourly wage of workers is fixed at $w and the price per machine is $r Write out the optimal inputs quantities, L and K, as a function of parameters, p, w, and r
Consider a price-taking firm whose production function is given by q = 3 L1/5 K1/9 where L and K denote respectively the amount of labour and capital the firm uses to produce q units of output. Suppose the price of labour is w = 16, the price of capital is 24 and the price of the firm's output is p=225 . Find the firm's cost function. Then enter below the value of the firm's marginal cost at the point where q = 100.
Consider Delta, a price-taking single-output, single input firm with the following production function:f (z) = z4/5a) Define non decreasing returns to scale and non-increasing returns to scale in terms of the production function and give conditions under which f(z) satisfies these properties. b) Suppose that the price of the input z is ѿ =1. Set up the cost minimization problem and solve for the conditional factor demand correspondence and the cost function. c) Set up Delta's profit maximization problem using the cost function you derived in (b) above and solve for the supply correspondence and the profit function.
Suppose in the long-rung the production function of a competitive firm is Q=f(L,K)= L1/5 K 1/2 , where L is the amount of labor and K is the amount of capital. The cost per unit of labor is w and the cost of capital is r, which is the interest rate. The price per unit of output is p. Derive unconditional factor demand functions.
A5
2. Consider the following information of a hypothetical firm: Q = 100K0.6 L0.8, w = = 1; r = 3 A. Solve for the cost-minimizing quantity of capital (K*) and labor (L*), and the minimum cost (C*) if the firm targets to produce 3,000 units of output. (10 pts) B. If target output increases to 6,000 units, solve for the new cost-minimizing quantity of capital and labor, and the minimum cost. (10 pts) C. Graphically illustrate the expansion path for the firm if it decides to increase its target output from 3,000 units to 6,000 units. (10 pts)
Assume a firm has the following short-run production function: q(L) = L+6L2-1/2L3 If this firm is going to maximize profits in the short-run by producing a strictly positive level of output (q>0), what is the lowest level of labor (L) they would employ? A.) Minimum L=?
Please answer in detail according to the picture. Show that the cost function is homogeneous of degree 1/(α+β) in output. How do the returns to scale (degree of homogeneity of the production function) relate to the propertiesof the cost function? Does this make sense to you? Explain clearly why.
A competitive firm’s production function is given by y= f(x1,x2)=x1ax2b If a=b=0.5 , the price of factor 1 is 12, and the price of factor 2 is 3, find the cost minimizing input combinations and the total cost of producing 40 units of output. Redo part (1), this time by first deriving the firm’s conditional factor demand functions and the cost function.
Can you please help solve question 9 a,b and c please show full working so I can compare it to my own work Thank you