A firm has production function q = K¹/2L¹/2 and pays w = 8, r = 2. a. The firm produces qo = 2 units of output as lowest cost. Capital should be equal to b. At qo = 2, the Isocost Line will have a vertical intercept equal to C. The firm wishes to expand to q₁ = 4. In the short-run the firm cannot vary its capital. Labour should be equal to

A firm has production function q = K¹/2L¹/2 and pays w = 8, r = 2. a. The firm produces qo = 2 units of output as lowest cost. Capital should be equal to b. At qo = 2, the Isocost Line will have a vertical intercept equal to C. The firm wishes to expand to q₁ = 4. In the short-run the firm cannot vary its capital. Labour should be equal to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Production Functions and Cost Functions in the short run and in the long run Consider the production function Q=KL. The firm needs to produce 64 units of output. The price of capital is R=$16 and the price of labor is W=$4 a. In the short run, the firm's capital is fixed at K=16. How much labor will it use? What is its short run total cost? Hint: Solve it for a generic Q and plug Q=64 only at the very end b. Find the firm's short run total cost, average total cost, and marginal cost curves. Hint: If you are trying to find cost curves, Q is unknown. c. Set up a Lagrangian to find the firm's optimal inputs in.
A firm engaged in the manufacture of RTWS faces the short-run production function Q = 250L - 5L², where L is the number of units of labor and Q is the number of RTWs produced annually. d.) How many RTWS can be produced by the firm in a year if there are 10 units of labor? e.) Compute the marginal product of the 40th unit of labor. f.) How many RTWs can be produced by the firm in a year if there are 40 units of labor? g.) Sketch the graph of the production function.
Theory of The Firm Consider the Cobb-Douglas production function: 1. Derive the conditional input demands. 2. Derive the cost function. 3. Caculate the substitution matrix. f(x₁,₂)= Ar₁₂- solve (1) quickly
Suppose the short-run production function is q = 5L0.5. If the marginal cost of producing the 5th unit is $13, what is the wage per unit of labor? Your Answer:
if a firm hire workers at $3 week , labour is 1 and output is 6 what is the fixed cost, variable cost, total cost, AVC, ATC and MC.
handwrite it out
1. A firm’s production function is Q = L1/2 K1/2 They have 16 units of capital (which is fixed in the short-run). The unit cost of labour is 2 and the unit cost of capital is 4. They receive an order of 4. a) Is the cost of fulfilling the order lower in the short- or long-run? Why is this the case?
If a firm has the production function q = f(L, K) = L + 2K, then its technology exhibits: constant returns to scale increasing returns to scale None of the above. decreasing returns to scale increasing marginal product
13) A firm's total cost function is TC = 0.5Q², where Q is the output level. What is the returns to scale of the firm's production function? A) Increasing returns to scale. B) Decreasing returns to scale. C) Constant returns to scale. D) Negative returns. E) None of the above.
Question 12. A firm's long-run production function is given by q = LK, where L denotes units of labour and K denotes units of capital. Each unit of labour L must be paid w > 0 and each unit of capital K incurs a cost of r > 0. Explain the cost minimisation problem. Explain the expansion path and derive the firm's long-run total cost function.
q = f{K, L) = 2KO.2L0.8 The cost of labor is w = 1 and cost of capital is r = 0.25. How much does it cost the company to produce q = 4 units? Vour ancwo
Imagine your firm has the short run production function: q = -2L4 + .5L² + 3L. What is the marginal product function? 08L³+ L 2L³ + .5L -2L³ + .5L +3 -8L³+ L +3