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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3b4319cd-fdf5-40ba-a5b8-b582f0483a95%2F96ae69f6-8420-4b0a-828a-2aed15a78289%2Fmrqz538_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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