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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3. The Chipper Cookie Company's output is given by the Cobb-Douglas Production function P = 120L0.7 K0.3, where P is the number of units produced when Lis the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 600 and K = 600? b. Find the marginal productivities. c. Evaluate the marginal productivities with L= 600 and K = 600. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $1200 then there is a constraint L+ K = 1200. Use Lagrange multipliers (^) to find the values of L and K that will maximize production and find the maximum production f. Find and interpret 2 for this problem. only need part e and f!
can you explain the solution for part b like for example how did they get M=y^2/2 and L=2y^2
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 production function of the firm below. Which of the following is NOT true? The marginal product of labor at B is 70 units. The total product is increasing as inputs to production increase. The marginal product of capital at point D is 50. The marginal products of both labor and capital are always increasing.
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Write out an example Cobb-Douglas production function. Derive the signsfor the relationship between labor and output and for marginal product oflabor and labor, holding other inputs fixed. Explain with economic intuition.
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…