You are given the following data:Cost = C = $12,000.00w = $100.00 per unit of laborr = $100.00 per unit of capitalThese data are used to construct the isocost line (C¹) in thediagram to the right.Suppose the wage increases to $300.00 but that the firm choosesto keep using the same amount of labor and capital to produce200 units of output.Given this new set of factor prices (w' = $300.00, r = $100.00), howmuch have costs changed if the set of input choices remains atpoint A? $. (Enter a numeric response using a real numberrounded to two decimal places.)Use the line drawing tool to draw a new isocost line showing anincrease in w to $300.00, given the firm chooses to keep using thesame amount of labor and capital to produce 200 units of output.Label this line 'C².Carefully follow the instructions above, and only draw the requiredobjects.CCapital, K240-220-200-180-160-140-120-100-80-60-40-20-q=2000-0 20 40 60 80 100 120 140 160 180 200 220 240Labor, L

The iso-cost line is the locus of points of labour and capital units that when used in production…

are given the following data: Cost = = $12,000.00 w = $100.00 per unit of labor r = $100.00 per unit of capital ese data are used to construct the isocost line (C¹) in the gram to the right. opose the wage increases to $300.00 but that the firm chooses keep using the same amount of labor and capital to produce O units of output. en this new set of factor prices (w' = $300.00, r = $100.00), how ch have costs changed if the set of input choices remains at nt A? $. (Enter a numeric response using a real number nded to two decimal places.) e the line drawing tool to draw a new isocost line showing an rease in w to $300.00, given the firm chooses to keep using the ne amount of labor and capital to produce 200 units of output. pel this line 'C², refully follow the instructions above, and only draw the required ects. C Capital, K 240 220- 200- 180- 160- 140- 120- 100- 80- 60- 40- 20- 0- 0 V 20 q=200 e 40 60 80 100 120 140 160 180 200 220 240 Labor, L

are given the following data: Cost = = $12,000.00 w = $100.00 per unit of labor r = $100.00 per unit of capital ese data are used to construct the isocost line (C¹) in the gram to the right. opose the wage increases to $300.00 but that the firm chooses keep using the same amount of labor and capital to produce O units of output. en this new set of factor prices (w' = $300.00, r = $100.00), how ch have costs changed if the set of input choices remains at nt A? $. (Enter a numeric response using a real number nded to two decimal places.) e the line drawing tool to draw a new isocost line showing an rease in w to $300.00, given the firm chooses to keep using the ne amount of labor and capital to produce 200 units of output. pel this line 'C², refully follow the instructions above, and only draw the required ects. C Capital, K 240 220- 200- 180- 160- 140- 120- 100- 80- 60- 40- 20- 0- 0 V 20 q=200 e 40 60 80 100 120 140 160 180 200 220 240 Labor, L

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 following statements are about the relationship between typical total product (TP), averageproduct (AP), and marginal product (MP) curves. Which statement is correct?O If TP is at a maximum, MP must be zero.O If TP is at a maximum, AP must be zeroO If TP is at a maximum, MP must be at a maximumO If TP is at a maximum, AP must be at a maximumO If TP is at a maximum, both AP and MP must be at a maximum.
Which of the following statements is true? O At every output level the marginal product curve lies above the average product curve. The marginal product curve always has a positive slope. The marginal product = average product curves when average product is at its maximum. O The marginal and average product curves intersect at the maximum level of output.
In the short run production function O a. All inputs are variable O b. All inputs are fixed O C. There are fixed and variable inputs Od. Technology alone is variable
1. Assume a daily production function for a firm is Q= min(3L, 4K) a, If L = 100 and K = 100 what quantity is produced? Explain why. b. What would be the cost-minimizing labor and capital combination for this firm to produce Q = 1200? (show your work) Labor = Capital = At this level of production from part b (Q-1200), if the wage rate is: w- $30 and the rental rate of capital is: r= $100, what is the total cost of production? (show your calculations) C.
A firm's production function is Q = 100L.0 K-4. The firm's input prices are PL = $40 and PK = $30. The firm wishes to produce Q = 3,000 units of output and minimize the cost of production. How much labor (L) should the firm employ? O A. L=20.96. O B. L=31.45. O C. L=34.26. O D. L=38.45. O E. L=41.22. QUESTION 2 A firm estimates its production function as Q = -2.4 + 20*L -.5*L2 + 30*K -1.00*K2 + 15*F -.3*F2. Total cost is TC = $2*L + $2.5*K + $1.75*F. The firm wishes to produce 400 units of output. Use Excel to find the cost minimizing amounts of L, K and F. How much F (Fuel) should the firm use? O A. F=7.90. O B. F=9.58. O C. F=10.75. O D. F=12.63. O E. F=14.88.
The elasticity of substitution of a Cobb-Douglas production function is constant alongthe whole range of any isoquant, and is equal to 1. Can you show this property that the elasticityof substitution is equal to one everywhere? Is the elasticity of substitution for a CES (ConstantElasticity of Substitution) production function the same?Kindly explain the answer to me.
Check my wor Units of Labor Total Output per Price of Good Day 10 $14 14 13 4 19 12 23 11 27 10 es 7 31 A firm's labor input, total output of labor, and product price schedules are given in the table. Labor is the only variable input. What is the marginal revenue product of the sixth worker? Multiple Choice $10 $60 $4 $17
When making a choice between factor inputs such as labor or equipment, or between two different kinds of equipment, a profit maximizing firm will choose O the cheaper, lowest price item, regardless of its productivity O the highest productivity item, regardless of its price O the item which yields the most productivity per dollar of price O none of the above
20
Suppose that this conveyor-manufacturing firm has another location and would like you to evaluate the input mix decisions at this new location. Here is all you know about the newlocation. The marginal rate of technical substitution is currently 0.5. The marginal product of labor at its target level of output is 60 rollers per hour. What is the marginal product of capital? Ifthe rental rate for capital is $24 per hours at this location and the wage paid to labor is $12 per hour, could this location be minimizing the costs of producing its target level of output? Explain briefly.
A company has the following production function for its product, f(k, I) = k"/2/1/2. It faces input prices v = 5 for capital and w = 20 for labor. How much does the firm use of each input if it wants to produce 10 units of its product? O a. I= 4, k = 25 O b. / = 5, k = 20 O c. 1= 20, k = 5 O d. 1= 25, k = 4 Clear my choice Suppose the market demand for a good is Qº = 2000 – 8p and market supply is QS = 5p + 700. There are 10 %3D firms with exactly the same cost function. How much does each firm produce? O a. 100 O b. 120 O c. 140 O d. 200 Clear my choice
QUESTION 3 Two inputs, labour (L) and capital (K) are used to produce a given output. The Marginal Product of L is equal to K: the Marginal Product of K is equal to L The hourly wage is w = 1; the interest rate is r= 2. Which of the following mixes of inputs could be cost minimizing for some level of production? O a. (K-0, L=100) Ob.(K=100, L-200) OC (K-200, L=100) O d. (K-1, L=3) O e (K=0, L-3)