4. A two-output-two-input firm has a transformation function of the type: 91 +92= where qi and q2 are outputs and z₁ and 22 are inputs. (a) Is this production function consistent with non-increasing returns to scale? Explain why or why not. (b) Fix 2₁ = 1 and 2 = 1. Draw the transformation function between q₁ and 92. (c) Fix q₁q=1. Draw the transformation function (isoquant) for inputs 2₁ and 2₂. (d) Find profit maximising 21.22.41.92 at prices equal to: p1 = 1, P2 maximisation problem, think about your picture in (b). With a transformation frontier of this form and such prices, does the firm = 2 and ₁= 1, ₂= 2. Hint: before you set up the profit produce both outputs? If not, rephrase the maximisation problem accordingly.

4. A two-output-two-input firm has a transformation function of the type: 91 +92= where qi and q2 are outputs and z₁ and 22 are inputs. (a) Is this production function consistent with non-increasing returns to scale? Explain why or why not. (b) Fix 2₁ = 1 and 2 = 1. Draw the transformation function between q₁ and 92. (c) Fix q₁q=1. Draw the transformation function (isoquant) for inputs 2₁ and 2₂. (d) Find profit maximising 21.22.41.92 at prices equal to: p1 = 1, P2 maximisation problem, think about your picture in (b). With a transformation frontier of this form and such prices, does the firm = 2 and ₁= 1, ₂= 2. Hint: before you set up the profit produce both outputs? If not, rephrase the maximisation problem accordingly.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.

Question

Plz answer ASAP.

4. A two-output-two-input firm has a transformation function of the type:
91 + 92 = z4z4.
where q and q are outputs and z and 2z are inputs.
(a) Is this production function consistent with non-increasing returns to scale? Explain why or why not.
(b) Fix z = l and z, = 1. Draw the transformation function between g and q2.
(c) Fix q = = 1. Draw the transformation function (isoquant) for inputs z, and z2.
(d) Find profit maximising z1. z2.91.92 at prices equal to: Pi = 1, p2 = 2 and w =
maximisation problem, think about your picture in (b). With a transformation frontier of this form and such prices, does the firm
produce both outputs? If not, rephrase the maximisation problem accordingly.
1, wz = 2. Hint: before you set up the profit

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Step 1: Introduction to Production Function :

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Step 2: Calculate the New output (y') :

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Step 3: the Transfermation function as follows

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Step 4: Transformation Function ( Isoquant)

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