A firm has the production function Q(L, K) = √K + 2√L. The price of one unit of capital isR> 0, and the price of one unit of labor is W> 0. Which of the following statements iscorrect?The production function can be represented by a CES production function [aL + bKº] for suitablevalues of a, b and p.The production function has increasing returns to scale.The marginal rate of technical substitution is MRTS (L, K) =2√LVROfW= R. the fi rm's demand for labor is four times the demand for capital.

The CES production function is a mathematical representation used in economics and production theory…

A firm has the production function Q(L, K) = √K+2√L. The price of one unit of capital is R> 0, and the price of one unit of labor is W> 0. Which of the following statements is correct? The production function can be represented by a CES production function [aL + bK"] for suitable values of a, b and p. O The production function has increasing returns to scale. The marginal rate of technical substitution is MRT Su (L,K) = 2 OfW= R. the fi rm's demand for labor is four times the demand for capital.

A firm has the production function Q(L, K) = √K+2√L. The price of one unit of capital is R> 0, and the price of one unit of labor is W> 0. Which of the following statements is correct? The production function can be represented by a CES production function [aL + bK"] for suitable values of a, b and p. O The production function has increasing returns to scale. The marginal rate of technical substitution is MRT Su (L,K) = 2 OfW= R. the fi rm's demand for labor is four times the demand for capital.

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

2.4 Draw the isoquants and find the cost function corresponding to each of the following production functions: Case A : q = ²2 Case B : q=0121 + a₂%2 Case C = q=a1²² +₂²² Case D : q = min 21 (23) 01 01 where q is output, z₁ and 22 are inputs. a1 and as are positive constants. [Hint: think about cases D and B first; make good use of the diagrams to help you find minimum cost.) 1. Explain what the returns to scale are in each of the above cases using the production function and then the cost function. Hint: check the result on page 25 to verify your answers/ 2. Discuss the elasticity of substitution and the conditional demand for inputs in each of the above cases.
Consider the following Cobb-Douglas production function: Y = 10L04K04. Suppose that the price of labor is w = 20 and the price of capital if r = 40. a- Derive the total cost curve for this production function. b- Derive the marginal cost curve for this production function. c- Plot the marginal and total cost curves for q = 1,2,3,4,5. What does it tell you about economies of scale for the production function? d- Suppose that the wage rate went up from 20 to 30. What would happen to the total wage bill relative to total costs, wL ;? What would happen to total costs? wL+rk*
Consider a short run production function q = cL+ K where the value for c = 3, using L units of labour and K units of capital. a) Compute the marginal product of labour. b) Does the production function exhibit decreasing, increasing or constant returns to scale? With a diagram. Note: The writing is clear and abbreviations are not allowed.
Which of the following statements is (are) TRUE?I. If labor and capital are perfect substitutes in production, the isoquant is a downward-sloping line.II. If a company needs to use inputs in fixed proportion such that the capital to labor ratio is always 2, the firm's isoquants are L-shaped.III. If the production function is given by Q = min(14, 7), the firm can produce, at minimum, 21 units of output. IIII, II, and IIIII and II Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Suppose that a firm has a production function given by: q= 10 L² K. The firm has 10 units of capital in the short run. Which of the following will describe the marginal product of labor (MPL) for this production function? Select one: a. Constant Marginal Returns to Labor b. Increasing Marginal Returns to Labor O c. Decreasing Marginal Returns to Labor
(a) Solve for and graph this firm’s isoquant at q = 10. Please label three points along this isoquant b) Does this production function exhibit increasing, decreasing, or constant returns to scale? Explain. Please corroborate your answer using a set of isoquants when the quantity of both inputs gets doubled.
I need this in words Not handwritten or no pic
1. The following production function is used to produce wheat, q, from capi- tal, K, and labour, L: q = f(K, L) = «³K/3 + B³L/3 a) Describe the role of a and B in this production function. b) Derive the slope of an isoquant for this production function and in- terpret your result. Draw the isoquant in (K L) space, labeling where appropriate. The drawing does not need to be exact, but the curvature needs to be approximately correct. Explain why under- standing the curvature is so important. | c) Does this production function follow the "Law of Diminishing Marginal Returns"? Show your work and explain your answer.
uppose a Cobb-Douglas Production function is given by the following:P(L,K)=60L^0.8K^0.2where LL is units of labor, KK is units of capital, and P(L,K) is total units that can be produced with this labor/capital combination. Suppose each unit of labor costs $900 and each unit of capital costs $3,600. Further suppose a total of $900,000 is available to be invested in labor and capital (combined).A) How many units of labor and capital should be "purchased" to maximize production subject to your budgetary constraint?Units of labor, LL = Units of capital, KK = B) What is the maximum number of units of production under the given budgetary conditions? (Round your answer to the nearest whole unit.)Max production = units
Consider the production function: Q = L1/4 K 3/4 Does this production show increasing, decreasing, or constant returns to scale? Show your work. I. II. Derive an expression for the marginal product of labor. Ш. Show mathematically whether the marginal product of labor is increasing, decreasing, or constant, as the labor input is increased. IV. Derive the average product of labor. Explain whether the average product of labor is increasing, decreasing, or constant, as the labor input is increased.
Consider the production function from earlier: Quantity of Haircuts 20 15 10 0+0 0 N 2 8 14 O Increasing marginal productivity O Constant marginal productivity O Decreasing marginal productivity 3 19 23 Labor (hours) 27 26 Total Product Curve From 1 labor hour up to 7 labor hours, what sort of marginal productivity does this production function have?
Given the following production function: q = 10KL. Assume that w = 25, r = 75 and C = 1200. (a) Mathematically find the minimum cost combination of capital and labour to produce a given level of output.b) Does the production function in part (a) show increasing returns to scale, decreasing returns to scale, or constant returns to scale? Explain. (c) Using isoquants and isocosts, graphically illustrate the effect of an increase in the wage rate, assuming the firm is producing at the same level of output.