= 5] Assume several identical firms engaged in perfect competition have the short run production function Q L¹/a. Each firm pays a wage of w for each unit of labor employed and fixed costs are 10. a) Assume the firm faces a tax, t, on its output. Determine how a change in this tax will affect output (22). b) Assume the firm faces a tax, t, on its profit. Determine how a change in this tax will affect output. c) based on your answers above, which of these two taxes is preferred by a government interested in minimizing the harm to workers in the industry?

= 5] Assume several identical firms engaged in perfect competition have the short run production function Q L¹/a. Each firm pays a wage of w for each unit of labor employed and fixed costs are 10. a) Assume the firm faces a tax, t, on its output. Determine how a change in this tax will affect output (22). b) Assume the firm faces a tax, t, on its profit. Determine how a change in this tax will affect output. c) based on your answers above, which of these two taxes is preferred by a government interested in minimizing the harm to workers in the industry?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3.
A firm's short-run production function is q=3L0.2 , while its cost function is C = 2L. Furthermore, the firm can sell its output in a perfectly competitive market at p = 40. 6.1 Find the value of the firm’s profit when L = 50 . 6.2 Calculate the level of L that satisfies the first-order condition for profit maximization. 6.3 Calculate the value of the second order derivative (SOD) that ensures profit is being maximised at the value of L found in 6.2 .
Sugar Enterprises manufactures high speed personal computers as its main product line. Its short run production function is given by Q = 3600K - 4.5K² where Q is the number of computers produced in a week and K pertains to the number of units of capital. c.) Compute the marginal product of the 200th unit of capital. d.) How many computers can be produced by the firm in a week if there are 200 units of capital? e.) Compute the marginal product of the 300th unit of labor. f.) How many computers can be produced by the firm in a week if there are 300 units of labor?
A firm’s production function is Q = 10 + 30L - .5L2+ 30K – K2, and its competitive demand function is PQ= MRQ = d = $40. The prices of L and K are PL = $6 and PK= $12. Suppose K is fixed at K =10. Use Excel Solver to find the profit-maximizing quantity (Q). A. 660. B. 684. C. 764. D. 788. E. 864.
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
)A firm selling in a perfectly competitive market where the ruling price is £20 can buy inputs K and L at prices per unit of £10 and £5 respectively. If it operates with the production function Q = K0.25 + L0.75, what is the maximum profit it can make?
If a perfectly competitive firm which produces two commodities, has the cost function C = 2Q² + 2Q? where Q1 and Q2 denote the production level of commodity 1 and commodity 2 respectively. (Note: There are 3 questions in the test regarding the information given above) If the prices of commodities are P and P2 respectively, find the optimal levels of output that the firm should produce to maximize its profit O a. Q 1/4P and Q b. Q; 1/6P and Q = 1/4P2 Oc. Q; =1/6P and Q; = 1/6P2 O d. Qi 1/4P, and Q = 1/6P, ; = 1/4P,
3. A firm has a production function given by 1 1 A) y = 4x³x² ; 1 1 B) y = 3x4x² ; a) What are the factor demand functions? b) What are the conditional factor demand functions? c) What is the cost function? d) What is the supply function? 1 1 C) y = 5x³x2; 11 D) y = 12xx².
2. Consider a market with 90 firms, each firm has a short-run total cost function as follows: TC(q) = 5q2, and a marginal cost function: MC(q) = 10q. Market demand is given by equation Qd(p) = 200 - p. a) What is the fixed cost? Solve the average variable cost function in the short-run. b) What is the supply function of each firm? c) Solve for the short-run equilibrium outcome: P*, Q* and q*. d) What is one firm's economic profit in this market?
2.2
A10
Ma3. Please give only typed answer.