**Production Optimization of Plastic Bins**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_L = K $ and $ MP_K = L $.*

Cost minimizing input combination is achieved when marginal rate of technical substitution is equal…

Answered: A firm produces plastic bins using…

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

The equation below is a production function, Q = (200)L + (100)K – (0.2)L2 – (0.1)K2 , where Q is output, L is labor and K is capital. What is the Marginal Product of Labor of this function?
RBW produces light sticks for one of their legendary girl groups, Kara. Suppose that RBWuses capital, K, and labor, L, to produce the light sticks. The production function is given as: Q(K,L)=2K0.75L0.51. Identify if RBW’s production function is increasing, constant, or decreasing returns to scale with a brief explanation. Also, solve for the company’s cost minimization problem by providing conditional demand functions of labor and capital, with respect to their input prices. Assume that w is the wage of labor and r is the rent cost of capital.2. Suppose that RBW is preparing for a mini-fan meet for the group’s “When I move” mini-album launch and that they have to provide 200 light sticks. The wage of labor, w, is $6.00 and the cost of capital, r, is $2.00. Determine how much labor and capital they have to use and the total cost of producing the light sticks.
A Firms production function is given by Q=L?K +1/L when L 2 1 and K 2 1). Find out AP , MPL , MPx and MRTS,x . At what input condition does APL become equal to MP ?
A small clothing manufacturer employs a production method that is approximated by the following production function: q=12KL², where L measures the number of labor hours and K measures the number of rental hours for the machines used in the clothing construction process. Does this production process exhibit increasing, decreasing, or constant returns to scale? Briefly explain your answer. The hourly wage rate for workers at this company is $15; and the rental cost on the machines is $75 per hour. The company has a total budget of $3,150 that it can allocate to cover weekly production costs. The goal of the company's owner is to maximize their output, subject to the constraint of their production budget. Determine the output-maximizing levels of labor and capital the owner will employ.
Firm D has production function F(K,L) = aK+2L. Very briefly, what is the interpretation of a in this function?
You are given the production function: Q(K,L)=10KαLβ What is the average product of labour, holding capital fixed at K? Simplify fully
The equation below is a production function, Q = (200)L + (100)K – (0.2)L2 – (0.1)K2 , where Q is output, L is labor and K is capital. What is the Marginal Product of Labor and capital of this function?
Consider a short-run production process for which APL(10)= 7 and MPL(10)=12. (meaning of notation: average product of labor when employing 10 units of labor is 7; marginal product of labor when employing 10 is 12). Will APL(11) be larger or smaller than APL(10) for this process? Please provide explanation too
Suppose a firm could produce data storage services using two inputs: high capacity hard drive (200 TB) or low capacity hard drive (100 TB). What is the production function and what is a typical set of isoquant?
How would you determine that a two-input Cobb-Douglas production function has decreasing returns to scale (DRS), increasing returns to scale (IRS) or constant returns to scale (CRS) depending on whether β is larger than, smaller than, or equal to one?
In the short run, a firm which has production function f(L, M) = 4L1/2M1/2 must use 4 machines. If the cost of labor is £4 per unit and the cost of machines is £4 per unit, what is the short-run total cost of producing 48 units of output? Use Lagrange
A firm's production function is given by Q = 20L0.8 K0.2. At that moment, the firm sets = 1,000 and K = 1,000. Which of the following combinations of L and Klies on the same isoquant? L = 1,063.9; K = 698.7 L= 1,063.9; K = 698.7 L=698.7; K = 1,063.9 L = 1,302.3; K = 936.1 L 936.1; K 1,302.3

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS