A manager of a perfectly competitive firm observes the production function Y = 100K ¹/³L 2/3. The firm currently hires labor = 20 units at wage = $40 and capital = 5 units at rent = $60. To maximize profit, manager should hire labor and rent capital. less, less less, more more, less more, more

A manager of a perfectly competitive firm observes the production function Y = 100K ¹/³L 2/3. The firm currently hires labor = 20 units at wage = $40 and capital = 5 units at rent = $60. To maximize profit, manager should hire labor and rent capital. less, less less, more more, less more, more

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: In the short run, the hot dog seller Doug's Dogs has a single variable input, labor (1) W = 50 The…

Q: 1. Suppose that a firm uses inputs labour (L, measured in person hours) and capital (K, measured in…

A: The production function is given as L is the measurement of labor in person hours.K is the…

Q: Review the Ledger-Enquirer news article located in Module 8 entitled: "Chick-fil-A begins…

A: Fixed costs: These are costs that do not change with the number of customers served. Examples of…

Q: A firm has the production function F(K,L) = L14K. This firm has %3D a. diminishing MRTS and…

A: The marginal rate of substitution refers to the rate at which one good is sacrificed to get one…

Q: QUESTION 23 A wheat farmer has a production function of q = KL = K0.5L0.5 with marginal products MPL…

A: Answer: Given, Production function: q=KL=K0.5L0.5 Marginal products:MPL=0.5KLMPK=0.5LK Since the q…

Q: Henry owns a Boba tea shop and produces delicious drinks under the production function q = 5KL where…

A: No, the marginal product of labor is constant (for a given K.

Q: 1. Profit maximization Find x* and y* that maximizes the following profit function. A(x, y) = 50x –…

A: (a). we have given π(x,y)=50x-2x2-2xy-4y2+60y-56differentiate with respect to…

Q: Consider a firm with production function: q = 2LK + K, where L is the amount of labor used and K is…

A: The production function: q=2LK+K L denotes units of labor and K denotes units of capital. The wage…

Q: . Suppose that a firm’s production function is f(L, K) = L + K. Does this production function…

A: Returns to scale is the measurement of the proportion by which the output changes when the inputs…

Q: ATC, ATC2 ATC3 LRATC Output (Q) The diagram above shows the long-run ATC curve for a firm with:…

A: 30. The long-run ATC curve for the firm is a curve that envelopes the minimum of the SRAC curve. In…

Q: At what output does the firm reach minimum average variable cost? Multiple Choice 100 600 80

A: The graph shows the marginal and average product curves for labor, the firm's only variable input.…

Q: An isoquant curve for producing a 10 lb bag of wheat is given as below. What is the Marginal Rate of…

A: The objective of the question is to calculate the Marginal Rate of Technical Substitution (MRTS) at…

Q: The production function of a firm is estimated to be Q=f(K,L)= KL + L. Market conditions require…

A: Production function: Q=f(K,L)=KL+LK denotes capital and L denotes labor. Q is the total output.Wage…

Q: 8. Average and marginal product of labor Caroline's pizza restaurant uses a combination of workers…

A: Marginal Productivity of Labor (MPL):Additional output gained by employing one more worker while…

Q: 2. Given the production function y=f(x1,x2 )=x1^(1/3) x2^(1/3). The amount of x2 is equal to 216 in…

A: We are going to find the factor demand for an input, Optimal amount of factor inputs and the…

Q: Review the Ledger-Enquirer news article located in Module 8 entitled: "Chick-fil-A begins…

A: Fixed costs: These are costs that do not change with the number of units produced. Examples of fixed…

Q: 1. You are given the following production function for a cost-minimizing firm: Q=500K o.5 the price…

A: We are going to use concepts such as Marginal rate of technical substitution to answer this…

Q: Instructions: Move the slider at the bottom of the diagram to change the quantity of labor hired for…

A: In economics, marginal product refers to the change in output resulting from employing one…

Q: unction for Soybeans Quantity of labor (workers) Quantity of soybeans (bushels) 1 25 45 3 60 4 70 75…

A: Here we calculate the total cost of 70 bushels by using the given information and choose the correct…

Q: 1. The New Age firm produces clean coal. New Age's production function is given by q = L3S3, where L…

A: The production function shows the relationship between the input used and the output produced.The…

Q: Use the following production function Q=1.25K0.3L0.5 where the price of Q is $10, the wage paid to…

A: To find the firm's output, use the provided production function:Where: the values are given as…

Q: 2 Suppose that production for good X is characterized by the following production function, O= K005…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: Part 1 A firm produces output (y) using two inputs, labor (L) and capital (K), according to the…

A: 1. The isoquant will be, L0.25K0.75=c (1). Slope of this firm's isoquant is equal to dKdL at…

Q: onsider a short run production function q = cL+K where the value for c =: sing L units of labour and…

A: Returns to scale measures the proportionate change in output if all inputs are changed by the same…

Q: (e) ₁ Suppose the firm operates in the short run: Capital is fixed at 24. Solve the firm's cost…

A: Production function: Here q denotes the level of output produced using labor L and capital K. In the…

Q: Consider a short run production function q=7L+K using L units of labour and K units of capital.…

A: Consider a short-run production function q=7L+K using L units of labour and K units of capital. 1)…

Q: Suppose that a firm has a production function given by: q= 10 L² K. The firm has 10 units of capital…

A: The production function shows the relationship between the input used and the output produced.The…

Q: Suppose that a firm's production function is Q=F(L) = -1L3-30L2 + 5,000L. Its marginal product of…

Q: Item 9 The following graph shows the marginal and average product curves for labor, the firm's only…

A: When L = 60, TVC = 2,000 x 60 = 120,000 AVC = TVC / Q = 120,000 / 3,600 = $33.33

Q: A firm uses inputs L and K to produce and good Q. The production function is Q-0.5LK. In the…

A: Costs refer to the expenses incurred in producing goods or services, such as labor, materials,…

Q: Which of the following is incorrect when there is one input (labor) in the production? The…

A: Answer: The production function is concave when its slope (marginal product of labor) falls. So the…

Q: he production function for a firm is ?=−0.6?^3+18?^2 ?+10L where q is the amount of output, L is the…

A: Production Function In economics, a production function refers to the physical output of a…

Question

100%

A manager of a perfectly competitive firm observes the production
function Y = 100K ¹/³L 2/3. The firm currently hires labor = 20 units at
wage = $40 and capital = 5 units at rent = $60. To maximize profit,
manager should hire
labor and rent
capital.
less, less
less, more
more, less
more, more

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Q9 please help fast! All info is there Suppose that the firm has production function F(L,M) = 4L1/2M1/2 (where L is the number of workers and M is that of machines) and currently uses 16 machines. To produce 32 units of output, how many workers does the firm need to hire?
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?
Hand written solutions are strictly prohibited
onsider a producer with budget C = 200 who can buy labor L at a wage w = 10 and capital K at a price r = 5. The producer has the following production function F(K,L) = 3K1/3 L2/3 . a. Does F(K,L) exhibit increasing, decreasing, or constant returns to scale? Show your work. Consider a new production function F(K,L) = K1/3 L2/3 , where is a? ? positive constant not equal to 3. Does the new production function exhibit increasing, decreasing, or constant returns to scale? b. Using F(K,L) = 3K1/3 L2/3, find the optimal bundle. Show your optimal bundle on a plot (this should include isoquant and isocost curves). c. Suppose the budget is reduced to C = 100 and then C = 50. Find the new optimal bundles. Plot these bundles, along with the initial optimal bundle, on one plot. Draw the expansion path PLEASE SHOW GRAPHS do not use chat gpt
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…
Consider a short run production function q=5L+K, using L units of labour and K units of capital. Compute the marginal product of labour. 2. Does the production function exhibit decreasing, increasing or constant returns to scale?