22. Consider the following production function: Q = 8K³/4¹/2, with capital (K) and labour (L) as the two inputs. (a) Find the marginal products of capital and labour and comment on whether they reflect increasing, constant or decreasing marginal returns. What type of returns to scale does the production function exhibit? (b) What are the average products of capital and labour and what happens to them as inputs increase? How do the marginal and average products relate to each other? Provide an intuitive explanation as to whether this relationship is as you would expect. (c) Assuming that the prices of Labour and Capital are w and r respectively, find the optimal conditional input demands of capital and labour. (d) Suppose that the firm must keep output at the original level, Qo, but that the price of labour, w, falls. By drawing a diagram, illustrate and explain how the firm's optimal inputs would change and what this would mean for the firm's demand curve for labour.

22. Consider the following production function: Q = 8K³/4¹/2, with capital (K) and labour (L) as the two inputs. (a) Find the marginal products of capital and labour and comment on whether they reflect increasing, constant or decreasing marginal returns. What type of returns to scale does the production function exhibit? (b) What are the average products of capital and labour and what happens to them as inputs increase? How do the marginal and average products relate to each other? Provide an intuitive explanation as to whether this relationship is as you would expect. (c) Assuming that the prices of Labour and Capital are w and r respectively, find the optimal conditional input demands of capital and labour. (d) Suppose that the firm must keep output at the original level, Qo, but that the price of labour, w, falls. By drawing a diagram, illustrate and explain how the firm's optimal inputs would change and what this would mean for the firm's demand curve for labour.

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

None
Affordability R109 per week. Proteas (R15) Roses (R8) Lavender (R6) No. MU TU WMU MU TU WMU MU TU WMU 1 40 40 32 32 20 20 2 35 75 26 58 18 3 30 105 24 82 15 4 23 128 (b) 101 12 5 18 146 16 117 9 6 15 161 10 127 6 (c) 7 0 (a) 8 135 0 8 -6 155 (d) 135 -4 9 -15 140 (e) 131 -7 Calculate the average utility of 4 protea flowers. Round off to zero decimal places. Do not forget the word "utils". Blank 1 Blank 1 Add your answer
10 Rate of Interest (%) 2 8 00 9 0 100 200 Amount of Money Demanded ($B) D1 OS D₁ D3 + D2 10 Rate of Interest (%) N 8 6 0 D2 11 100 200 300 400 Amount of Money Demanded ($B) 10 Rate of Interest (%) 2 8 9 Which one of the lines represents the asset demand for money? 0 S D3 100 200 300 400 500600 Amount of Money Demanded ($B)
Do not use Ai
Only typed solution
BVM manufactured and sold 25,000 small statues this past year. At that volume, the firm was exactly in a breakeven situation in terms of profitability. BVM’s unit costs are expected to increase by 30% next year. What additional information is needed to determine how much the production volume/sales would have to increase next year to just break even in terms of profitability? (a) Costs per unit (b) Sales price per unit and costs per unit (c) Total fixed costs, sales price per unit, and costs per unit (d) No data is needed, the volume increase is 25, 000 + 25, 000(0.30) = 32, 500 units.
Costs and revenues (in thousands) 99 15 30 45 60 75 901052013550165 80195 Quantity per period (in thousands) Tools 1 O A
None
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
a b C $40; $40 $40; zero $150,000; $150,000 zero; $40
K L Q MPL APL (Q/L) VML (MPL*P) FC VC (L*150) TC 5 0 0 0 0 5 1 50 50 50 50 25 150 175 5 2 125 75 62.5 150 25 300 325 5 3 225 100 75 200 25 450 475 5 4 375 150 93.7 300 25 600 625 5 5 450 75 90 150 25 750 775 5 6 450 0 75 0 25 900 925 5 7 400 -50 57.14 -100 25 1050 1075 5 8 425 -75 53.12 -150 25 1200 1225 5 9 450 -25 50 -50 25 1350 1375 5 10 500 -50 50 -100 25 1500 1525 5 11 525 25 47.7 50 25 1650 1675 Define firm’s fixed costs. Next, what is Firm’s FC in the Table above. Why?
Lifewear, a manufacturer of women's sports clothes, is considering adding a line of skirts and jackets. The production would take place in a part of its factory that is currently not being used. The first output would be available in time for the 2021 fall season. The following information is available. Answer parts (a) through (d). New Product Line Information First cost in 2020 ($) 15,100,000 Planned output (units/year) 324,000 Observed, current dollar MARR before tax Study period Materials 0.25 6 years Year 2020 Prices ($/unit) Labour 12 8.25 35 Output a. What is the real internal rate of return? (This is most easily done with a spreadsheet.) The real internal rate of return is about percent. (Round to one decimal place as needed.) b. What inflation rate will make the real MARR equal to the real internal rate of return? The inflation rate would need to be about percent. (Round to two decimal places as needed.) c. Calculate the present worth of the project under three possible future…