5. Cost MinimizationSuppose a firm has the technology of F(K.L) 40LK Draw a graph of the firm's not at8000 units of output (does not have to be exact). Put laboren the s-axis and capital on the yAXIWhat is the formals for the firm's MRTS at any level of Land KSuppose the price of labor is 5 while the price of capital is 10, and the fiem wants to produce8000 units of output. What is the cost minimiring combination of labor and capital?

Production function describes the technical relationship between the factors of production and the…

5. Cost Mininization 8000 Suppose a firm has the technology of F(K.L)-40LK Draw a graph of the firm's opant a of output (does not have to be exact) Put labor on the s-axis and capital on the y What is the formals for the firm's MRTS at any level of 2 and K Suppose the price of labor is 5 while the price of capital is 10, and the firm wants to produr 8000 ts of output What is the cod minimining combination of labor and capita

5. Cost Mininization 8000 Suppose a firm has the technology of F(K.L)-40LK Draw a graph of the firm's opant a of output (does not have to be exact) Put labor on the s-axis and capital on the y What is the formals for the firm's MRTS at any level of 2 and K Suppose the price of labor is 5 while the price of capital is 10, and the firm wants to produr 8000 ts of output What is the cod minimining combination of labor and capita

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Con Co. produces a collectible card game. Currently, the price of capital is at $50 and the price of labor is at $10. The marginal product of capital is 200 and the marginal product of labor is 30. To minimize cost of the given output, Con Co. should Use more capital Use more capital and labor Leave capital and labor as is Use more labor
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Digging calms by hand in Sunset Bay requires only labor input. The total number of calms obtained per hour (q) is given by :Q = 100√LWhere L is labor input per hour. A. Graph the relationship between q an LB. What the average productivity of labor in Sunset Bay? Graph this relationship and show that output per unit of labor input diminishes for increase in labor input. C. It can be shown that the marginal productivity of labor in Sunset By is given by:MPL =50√LGraph this relationship and show that labor’s marginal productivity is less than average productivity for all values of L . Explain why this is do.D. Explain the concept of diminishing returns to labor and how this concept related to increasing marginal costs.
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Refer to the graph shown. Within which section(s) of the production function is marginal product decreasing? A B C Number of workers O Band C O A O B O A and B Output
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Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm is producing in the short run, capital is fixed at K but capital is variable in the long run. K, Capital K A B Q3 Isoquant Q2 Isoquant Q₁ Isoquant L, Labour Which of the following can we conclude? O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, B and C represent cost minimisation in the long run only. There are no points that represent cost minimisation in both the short run and the long run. Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only. Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in…
answer question d Q5. Jason is running a cleaning business, there are available labours (L) and machines (M) for Jason to use as inputs to produce cleaning service for his clients. a) Suppose Jason must use both labours and machines without any specific ratio to complete the service for his clients, please write down the general production function formula for Jason. hint: you could use any letter if you want] b) Under the function form of a), assume Jason's Marginal Rate of Technical Substitution (MRTSL, M) equals to 2, how do you interpret it? c) Assume Jason now can use only single input, either labour or machine to complete the service, please write down the general production function formula for Jason. hint: you could use any letter if you want] d) Under the function form of c), assume Jason's Marginal Rate of Technical Substitution (MRTSL, M) is always larger than the market price ratio between labour and machine (w/r), what should Jason do? why?