Capital=K2620Bslope=-MP/MPkXB=180XA =120slope-w/r1013 labora) If w=5 and r=6, show the equation for the isocost that goes throughpoint A and point B.b) Using the information from the graph above plus point (a) pleaseproduce a graph with total cost on the y-axis and output on the x-axisc) Using the information from the graph determine if the productionfunction has increasing, constant, or decreasing returns to scale. Showall your calculations.d) Why are points A and B economically efficient?

Part (a)Given:Wage rate, w=5Rental rate of capital, r=6The isocost line equation is given by:…

Answered: Capital=K 26 20 B slope=-MP/MPk XB =180…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
Show illustration and explain the special case of production functions "Fixed proportions production function."
Refer to the graph below: y2 The graph above illustrates a production set of a firm. (a) Which assumption(s) do(es) the production set violates? Explain. (b) Suppose the firm decided to scale all inputs up or down by some amount t > 0. What will happen to the level of output?
Please help me understand this with explanation and complete solutions thank you
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function is: q=min{L/3, K0.5}, where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 4 kg of kiwi fruits and 6 hours of labour, he can produce 2 bottles of juice. a) Draw isoquants for q = 1, q = 2 and q = 3 on a graph with labour on the horizontal axis and kiwi fruits on the vertical one. = $5 per kg. b) Let the price of labour-hour be given by w = $18 and the price of fruit by p What is the optimal amount of labour and fruit to produce q bottles of juice if Cheburashka strives to minimise costs? (Note that you need to provide expressions L(q) and K(q)). Illustrate on the graph from a) by drawing corresponding isocost lines. c) Draw the Cheburashka's expansion path on a graph from a). Derive an expression for the expansion path, i.e., K as a function of L. How does it depend on the wage and the price of kiwi?
When Marginal Product of Labor intersects the Average product of labor, minimum average product of labor obtains at the intersection. True False
can you please provide explanations and working
***PLEASE NOTE - An answer is NOT needed for parts A, B and C; these are included to assist with answering part D. Only an answer for part D is required, but it is derived from the previous answers*** Given: A farmer raises peaches using land (K) and labor (L), and has an output of ?(?,?)= ?0.5?0.5 bushels of apples. a. Find several input combinations that give the farmer 6 bushels of apples. Sketch the associated isoquant on a graph, with L on the x-axis and K on the y-axis. b. In the short run, the farmer only has 4 units of land. What is his short-run production function? Graph it for values of L from 0 to 16, with L on the x-axis and output on the y-axis. What is the name of the slope of this curve? c. Assuming the farmer still only has 4 units of land, how much extra output does he get from adding 1 extra unit of labor if he is already using only 1 unit of labor? How much extra output does he get from adding 1 extra unit of labor if he is already using 4 units of labor?…
answer question d Q5. Jason is running a cleaning business, there are available labours (L) and machines (M) for Jason to use as inputs to produce cleaning service for his clients. a) Suppose Jason must use both labours and machines without any specific ratio to complete the service for his clients, please write down the general production function formula for Jason. hint: you could use any letter if you want] b) Under the function form of a), assume Jason's Marginal Rate of Technical Substitution (MRTSL, M) equals to 2, how do you interpret it? c) Assume Jason now can use only single input, either labour or machine to complete the service, please write down the general production function formula for Jason. hint: you could use any letter if you want] d) Under the function form of c), assume Jason's Marginal Rate of Technical Substitution (MRTSL, M) is always larger than the market price ratio between labour and machine (w/r), what should Jason do? why?
Brian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{1/3L, 2K}. The inputs are perfect complement.If he uses 0.5 kg of wool and 3 hours of labour, he can produce 1 t-shirt. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axisand wool on vertical axis.
: Suppose that the production functions be like as (A) i) Y = X15 X20.5 ii)Y= X10.5 + X20.5 Find MRTS of these functions
5. The production function is given by y=x₁ + 2x2. If w₁ = 10, w₂ = 8, will the firm use input factor 2 to minimize the cost? In what case will the firm use input factor 2?

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