4. A firm has production function q = KL. The wage and rental rates are both 10. Does this production function exhibit increasing, decreasing, or constant returns to scale? Explain. b. The firm currently has 50 units of capital. What are its short run total cost (TC), marginal cost (MC), average variable cost (AVC), and average total cost (ATC) functions? Draw MC, AVC, and ATC on a well-labeled graph. Does this firm have a diminishing marginal product of labor? Explain.

4. A firm has production function q = KL. The wage and rental rates are both 10. Does this production function exhibit increasing, decreasing, or constant returns to scale? Explain. b. The firm currently has 50 units of capital. What are its short run total cost (TC), marginal cost (MC), average variable cost (AVC), and average total cost (ATC) functions? Draw MC, AVC, and ATC on a well-labeled graph. Does this firm have a diminishing marginal product of labor? Explain.

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: Explain the influence of costs in the short run on a firm's output

A: Short-run is a period of time when there is some cost which cannot be varied.

Q: Cost Functions: A firm operates with a production function, y = 4√lk and input prices Pe = 6 and Pk…

A: A mathematical function that depicts the relationship between the input factors of production and…

Q: Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only…

A: Given: To Find: The short-run total cost if Ike's Bikes is currently producing 600 bikes: The…

Q: H8. Which of the following production functions exhibit(s) constant returns to scale?I. Q = Min…

A: There are CRS if the doubling the all inputs result in the double of output.

Q: Assume that with 20L and 30K a given firm can produce 100 units of output and with 40L and 60K it…

A: Here, it is given that 100 units of output can be produced using 20L and 30K, while275 units of…

Q: 2. Suppose a producer's production function is F(X,L) = 3KL The cost of K is 20 (r=20) and the cost…

A: The production function of the firm represents the relationship between the physical inputs used by…

Q: Costs # Refer to the graph above to answer this question. Which curve illustrates marginal cost? A)…

A: Marginal cost will be an extra cost incurred by an entity for producing an additional unit of…

Q: A firm’s marginal product will be at a maximum at which of the following levels of output?…

A: To determine the level of output at which a firm's marginal product will be at a maximum.

Q: Scenario 10-1 The demand curve for gasoline slopes downward and the supply curve for gasoline slopes…

A: Given private cost = $2.83 Social cost = $3.12

Q: Tatal Cost AVC AFC ATC MC 25 5. 20 10 40 10 10 20 65 15 6.67 21.67 30 100 20 25 40 145 4 29 50 25 20…

Q: A firm faces the production function: q=10L^0.32 K^0.56 (a) What kind of returns to scale does…

Q: Suppose the firm's production function is Q = 2KL, where Q is units of output, K is units of capital…

A: We can find out the short run production function using the capital K= 4.

Q: 5. Consider the cost for a firm as described by the function: 3000 C(q) = 200 + q². 21 a. What are…

A: The objective of the question is to understand the cost structure of a firm, derive the average and…

Q: . A firm’s production is represented by the following function: Q = L0.4 K0.6 . The rental rate of…

A: The link between the physical production and the numerous production parameters, or the output to…

Q: Continue analyzing the production for a firm. Use the Total Variable Costs calculated in the…

A: Production is the process of creating goods or services. It involves the use of inputs, such as raw…

Q: he table shows the shows the quantities of labor and capital required to produce various levels of…

A: Production function A production function is an equation that thus represents the relationship…

Q: 4. A firm producing cars. The production function for shoes (Q) is: Q = K"² L"² where K is capital…

A: Answer -

Q: A firm has the production function f(x, y) = x³yº.3, where a>0.7. This firm has Select one: O a.…

A: Given Production function : f(x,y) = x^a × y^0.3 , where a>0.7. To check whether it has what…

Q: 1) Use the graph to answer the question. Between points C and D, the long-run average total cost…

A: As per the guidelines answer is given to the first question. (1) "Long run average total cost curve…

Q: Suppose that a firm has a production function given by: q= 10 L² K. The firm has 10 units of capital…

A: The production function shows the relationship between the input used and the output produced.The…

Q: 22. What does the Long Run Average Cost curve depict? a) It depicts the relationship between Average…

A: Long-run average total cost (LRATC) is a business metric that addresses the average cost per unit of…

Q: Explain the meaning of fixed costs. Provide a few examples of firms' costs that are likely to be…

A: A firm's fixed costs are costs that do not change. It is irrespective of whether production or sales…

Q: A firm’s production function is Q = L1/2 K1/2 They have 16 units of capital (which is fixed in the…

A: Given Q =L1/2K1/2 ...... (1) In short-run K = 16 (fixed) Cost of labour =2 and cost of capital =…

Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

4. A firm has production function q = KL. The wage and rental rates are both 10.
a. Does this production function exhibit increasing, decreasing, or constant returns to
scale? Explain.
b. The firm currently has 50 units of capital. What are its short run total cost (TC),
marginal cost (MC), average variable cost (AVC), and average total cost (ATC)
functions? Draw MC, AVC, and ATC on a well-labeled graph.
Does this firm have a diminishing marginal product of labor? Explain.
C.

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 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

5. Selpats produces pens with the production function f(k, l) = 200vkl. The price of capital is wk = 40 and the price of labor is wL = 10. (i) Determine the optimal input bundle for producing y pens in the long run and find the long-run cost function. (ii) Determine the optimal input bundle for producing y = 10,000 pens in the long run. (iii) Now suppose that capital is fixed at k = 25 in the short run. Find the short-run total cost function and the short-run marginal cost function. Explain the relationship between the short-run and long-run marginal costs when y = 10,000. (iv) Suppose that the price of output is p. Which value of y maximizes short-run profit? р.
7) What is the relationship between AFC, AVC & ATC? How are these calculated? 8) A firms produces an output of 10 units, when their total cost is $50 and their fixed costs are $10. Find: VC, AFC, AVC & ATC. 9) What are two examples of fixed costs?
Consider the production function of the firm below. What is the total output at point C? a. 150 b. 100 c. 25 d. 75
Lesson 7- Production Question 8
1. Suppose the production function is Q = 8L + 15K where Q is the quantity of output, L is the quantity of labor used in production, and K is the quantity of capital used in production. What can be said about this production function? It has Decreasing Returns to Scale It has Constant Returns to Scale It has Increasing Returns to Scale There isn’t enough information to determine the Returns to Scale for this production function 2. You’re dreaming of what to do during a nice summer day. You could mow the lawn which you would pay someone $15 to do for you. You could go for a walk which you value at $11. You could also take a nap and ignore everyone and everything else which you would pay $29 to do. If you to take a nap, what is your opportunity cost? Group of answer choices $29 $26 $15 $11
None