Consider a firm producing Smirnoff Mule which uses two inputs-machines and labor-toproduce output (Q). The amount paid to a unit of machine input is called rent; on the otherhand, the amount paid to the unit of labor is called the wage rate. If the wage rate is atP500/unit and the rent for the machine is at P1200/unit, given the following table:TABLE 2Output0 10 20 30 40 50 60 70Machine Inputs 30 30 30 30 30 30 30 30Labor Inputs60 110 150 210 310 450 6306. Compute for the firm's TV C, TFC, TC, AV C,AFC, AC, and MC. (Show your formulas).

The overall cost paid by a firm to create a given amount of a product or provide a service is…

Answered: Consider a firm producing Smirnoff Mule…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Units of fixed input K Labor Hours (L) Output (Q) TFC TVC TC AFC AVC ATC MC 3 0 0 3 1 4 3 2 90 3 3 160 3 4 200 3 5 230 3 6 250 3 7 260 3 8 265 A firm has the following production function: Q=f (L/K). It must pay $20 per hour of labor and rents its fixed inputs (K) for $30 per unit. Complete the following table and answer the questions that follow:
I am having trouble finding out the formulas to complete this question: The production function for a firm is q = -0.6L3 + 18L2K + 10L where q is the amount of output, L is the number of labor hours per week, and K the amount of capital. The wage is $100 and the rental rate is $800 per timeperiod. Using Excel, calculate the total short-run output, q(L), for L = 0, 1, 2, …, 20, given that capital is fixed in the short run and K = 1. Also calculate the average product of labor; APL, and the marginal product of labor, MPL. For each quantity of labor in (a), calculate the variable cost, VC; the total cost, C; the average variable cost, AVC; the average cost , AC; and the marginal cost, MC. Using excel, draw the AVC, AC, and MC curves in a diagram. You will not be able to solve the total product curve for L as a function of output. So, instead construct a table. Headings: L q(L) APL MPL VC TC AVC AC MC w/APL w/MPL
BJO Ⓒ4 f(X₁, X₂) = (x₁² + X₂²) & 0
A baker uses labor (L) and raw materials (M) to produce mini Muhlenberg Mule sugar figurines (q). The process is fairly simple as workers only must make the sugar mixture and pour the mixture into the mule molds. The baker’s production function is as follows f(L, M) = L 0.50M. Let wL and wM denote the prices of a unit of L and M, respectively. (a) Write the firm’s cost minimization problem if it wants to produce q units of output. (b) Write the Lagrangian function that describes the cost minimization problem. (c) Derive the long run conditional factor input demands for L and M as a function of wL, wM, and q; L ∗ (wL, wM, q) and M∗ (wL, wM, q). (d) Suppose wL = $25 and wM = $2. Determine the cost-minimizing combination of inputs if the baker wants to produce 200 mules. (e) Using wL = $25 and wM = $2 and the demand functions from part (c), write the firm’s long run cost function CLR(q).
Please see attached image for question. Please note that there is an overline above the "K" in the oven/captial equation (K = 1). It does not show clearly in the image.
Q44 Suppose a firm with the usual U-shaped cost curves is producing a level of output such that its short-run costs are as follows:ATC = $0.37 per unitAVC = $0.32 per unitAFC = $0.05 per unitMC = $0.43 per unitGiven these short-run costs, as the firm increases its output, ... a. The point of diminishing average product of the variable factor has not yet been reached. b. The average product of the variable factor must be increasing. c. The marginal product of the variable factor is at its minimum point. d. The marginal product of the variable factor must be increasing. e. The marginal product of the variable factor must be decreasing.
Assume there is a linear isoquant where the input combination K = 10, L = 0 produces Q = 100. Assume that this isoquant has a MRTS (marginal rate of technical substitution) such that an increase in L by 1 unit requires the firm to give up – ½ unit of K. Assume PL = $1 and PK = $1. What is the smallest total cost necessary to produce Q = 100? $20 $10 $50 $100
Given the following data on input and output levels. Suppose the output price is $5 and input price is $10. Find the values of AVP and MVP when X = 4: X 0 2 4 6 8 10 12 Y 0 100 250 450 600 700 750 $312.50 and $375 $20 and $375 $265.50 and $475 $20 and $750
Q3, A firm operates with the following Cobb-Douglas production function where Q is output, L is labor hours per week, and K is machine hours per week. Cobb-Douglas Production Function: Q = 5(L1/3K2/3) The firm intends to produce 5,000 units of output per week by contracting employees for $40 per hour and renting machinery for $10 per hour. Determine the cost minimizing combination of labor and capital for the firm. Based on your solution in part (a), calculate the firm’s total cost of producing 5,000 units of output per week.
Could you solve d,e,f ? Thank you
Consider a production function Q = (K1/2) + (L1/2) + (M1/2) where L, K, M represent labor, capital, and material. Input prices for L, K, M are 1, 1, and 1. The firm wants to produce 12 units of output. a) What is the total cost if K = 4? b) What is the total cost if K = 4 and L = 9?

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