A firm produces plastic bins using labor (measured in man-hours) and capital (measured in machine-hours), according to the production function Q = f(L,K) = √LK, where Q is the number of plastic bins produced. Suppose that the cost of labor is $60 per worker-hour and the cost of capital is $15 per machine-hour. What is the cost minimizing input combination if the firm wants to produce 10,000 plastic bins? Hint: The marginal products are MP₁ = = and MPK 2√√I = 2√√K
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- What is the difference between a fixed input and a variable input?A firm produces plastic bins using labor (measured in man-hours) and capital (measured in machine-hours), according to the production function Q = f(L,K) = LK, where Q is the number of plastic bins produced. Suppose that the cost of labor is $20 per worker-hour and the cost of capital is $10 per machine-hour. What is the cost minimizing input combination if the firm wants to produce 28,800 plastic bins? Hint: The marginal products are MP, = K and MPg = L.The production function is f (L, M ) = 5L1/2M 1/2, where L is the number of units of labor and M is the number of machines. If the amounts of both factors can be varied and if the cost of labor is $9 per unit and the cost of using machines is $64 per machine, then what is the total cost of producing 12 units of output?
- 1/3 1/3 Farmer Joe's production function is f(x1, x2) = ", where xị is the number of pounds of lemons he uses and x2 is the number of hours he spends 1/21/2 2wi"wy3/2, where y is the squeezing them. His cost function is c(w1. w2, y) = number of units of lemonade produced. (a) If lemons cost $1 per pound, the wage rate is $1 per hour, and the price of lemonade is p, what is his marginal cost function?Suppose that a firm's production function is: 112 q= 10L05K0.5 98 Its marginal product functions are: 84 MP =5KL05 = 0.5q/L and 70 MP 5L05K5 =0.5g/K. The cost of a unit of labor, w, is $20 and the cost of a unit of capital, r, is $80 Isoquants for output of 140 and 280 are illustrated in the figure to the right 42 20 Initially, the firm is producing 140 units of output and has dotermined that the cost-minimizing quantities of labor and capital are 28 and 7, respectively. 14+ Suppose now that the firm wants to increase output to 280 units. If capital is fixed in the short run, how much labor will the firm require? 9. 14 25 42 04 LUnits of labor The firm will now require units of labor. (Enter your response rounded to two decimal places. ) K Unts of captaEmma sells hot chocolate outside of Yankees baseball games. They have two inputs in the production of hot chocolate: (hot chocolate mix (x1, measured in kg) and labour (x2, measured in hours. The production function for hot chocolate (in liters) is: f (x1 , x2) = (x1)1/3(x2)1/3 A) Does this firm have constant, increasing or decreasing returns to scale? The cost of hot chocolate mix is w1, and the cost of labour is w2. If Emma produces "y" liters of hot chocolate the cheapest way possible, then B) How many kilograms of hot chocolate mix would they use? C) How many hours of labour? D) What is the cost function of producing this much hot chocolate?
- A firm can manufacture a product according to the production function Q = F(K, L) = K0.5L0.5. (a) What is the average product of labor, APL, when the level of capital is fixed at 36 units and the firm uses 16 units of labor? (b) What is the marginal product of labor, MPL, when capital is fixed at 36 units? (c) Suppose capital is fixed at 36 units. If the firm can sell its output at a price of $100 per unit of output and can hire labor at $40 per unit of labor, how many units of labor should the firm hire in order to maximize profits?30. The production function is f(L, M) = 4L1/2 M¹2, where L is the number of units of labor and M is the number of machines used. If the cost of labor is $49 per unit and the cost of machines is $16 per unit, then what is the total cost of producing 5 units of output?Ten-year old Sarah is starting a lemonade stand, she uses baskets of lemons (L) and other ingredients (O). She is able to produce lemonade according to the production function f(L, O) = 1 2 L 2O. The cost of a basket of lemons is $10 and the average cost of the other goods is $4. (a) Derive MPL and MPO. (b) Currently Sarah is using 4 baskets of lemons and 40 units of the other goods. Using this information, calculate MPL and MPO. (c) True/False. At her current use of inputs Sarah is minimizing costs. If true, explain why. If false, what would you recommend Sarah do? (d) Sarah wants to produce 320 units of lemonade. Determine the cost minimizing combination of inputs to use. (e) Assuming no changes in the market price of lemonade nor in the prices of the inputs, if Sarah continues to produce 320 units of lemonade in the long run, what will Sarah’s long run costs be.
- Suppose that a firm's production function is: Its marginal product functions are: MP₁ = 5K05/L0.5 = 0.5q/L and 9= 10L 0.5 0.5 MPK = 5L0.5/K0.5 = 0.5q/K. The cost of a unit of labor, w, is $80 and the cost of a unit of capital, r, is $20. Isoquants for output of 140 and 280 are illustrated in the figure to the right. Initially, the firm is producing 140 units of output and has determined that the cost-minimizing quantities of labor and capital are 7 and 28, respectively. Suppose now that the firm wants to increase output to 280 units. If capital is fixed in the short run, how much labor will the firm require? The firm will now require 27.99 units of labor. (Enter your response rounded to two decimal places.) K If the marginal rate of technical substitution is find the optimal level of capital and labor required to produce the 280 units of output. The optimal level of capital is units and the optimal level of labor is integers.) units. (Enter your responses as K, Units of capital 112 98-…Do not use chatgptWhen a firm has a fixed input, all of which must be used all the time, it said that input is?