Explain the concept of increasing-opportunity-cost with constant returns to scale. In your answer, assume that more of the labor supply is allocated to production of labor-intensive good X and more of the capital stock is allocated to capital-intensive good Y.

Q: Question: 1 A firm produces output according to the following production function: q = 10 K^1/4…

A: Cost minimization problem of producer: For the given output level the firm and per unit cost of…

Q: Assume the Cobb-Douglas production function is Q= L ^0.75 K^0.5 and if price of labor per day is 5…

A: Given  Q =L0.75 K0.5     ......... (1) Price of labour = 5 birr per day  Price of capital = 10 birr…

Q: Now consider Marie’s problem in the long run, where her stock of cattle may vary. Set up her long…

A: Costs are the expenses that firms incur during the production processes. The firm’s costs depend…

Q: Identify 10 examples of direct factors (labor, capital, technology, resources) used for production…

A: Economic factors are the components or circumstances that affect how products and services are…

Q: 8. An economy is endowed with = 100 units of capital and L= 200 units of labor. Two goods are…

A: K=100 L=200 M = Km0.5 * Lm0.5  T = KT1/3 * LT2/3

Q: Answer the following questions on the basis of this information for a single fifirm: total cost of…

A: Given that,              Total cost of capital = $1000 Cost of labour = $12/unit Cost of raw…

Q: Answer the question based on the following information: Suppose 30 units of product A can be…

A: A technological relation is used in the production produced by the input and output. It expresses…

Q: 1. Assume that production technology is defined as Q = AL K³ where Q is the quantity produced, L is…

A: A production technology is the particular mix of labor, physical capital, and technology that makes…

Q: Yj-2x11 Y2=3x12 Q 4. ( A) Consider the following production functions: y2 are products and xj is the…

A: Given information Y1=2X11 Y2=2X12 Y are the products X are inputs Total use of X= 1/2Y1+1/3 Y2

Q: Use a graph of labor input and its marginal product to argue that in the specific factors model(i.e.…

A: The Specific Factors Model is an economic model that examines how changes in the availability of a…

Q: Professor Steven and Professor John are going to produce a new introductory textbook. They face the…

A: Given: Production Function: q=S1/2J1/2 Number of hours spent by smith (S)=900 Smith's value of…

Q: Point C only. O Points D and B. Points D, C, and B. O Point D only.

A: The cost is minimized where the isocost line tangents the isoquant.

Q: Assume that quantities do not need to be integers. That is, it is feasible for Andreas to knit 37.25…

A: The three economic problems are: (i) Human needs are unlimited. (ii) The resources to satisfy human…

Q: Suppose that the marginal product of labor for a local bakery is 84 units per day and the price of…

A: The least cost combination of factors of production is the quantity of each input that the firms…

Q: An economy has 22 units of labor and produces goods x and y. The production functions are x = 0.2L,…

A: Production possibility frontier shows different combination of two good or services that can be…

Q: Assume an economy producing only two goods (shoes and computers) with a fixed amount of productive…

A: Production possibilities frontier shows the combinations of two goods that an economy can produce…

Q: Demonstrate that the production functions satisfy the conditions for monotonically increasing,…

A: Given information An economy producing 2 goods Corn and potatoes Production function for Corn…

Q: 4. Assume that fruit-picking can be done by children or adults, but that adults are twice as…

A: Production function Q=10*(2LA+LC) LA--- adult labor LC---child labor Price of LA=100 per day Price…

Q: combination of labor and capital maximizes output with a cost of Birr 720? b. What is the maximum…

A: With the given production function, it can be inferred that the firm uses two inputs labor (L) and…

Q: Per-unit cost-$

A: The average cost associated with producing or obtaining a singular unit of a particular product or…

Q: 3.* Consider the Heckscher-Ohlin model with the following production functions for food and cloth…

A: The production function having higher rate of marginal technical substitution of capital  in place…

Q: Assume that quantities do not need to be integers. That is, it is feasible for Andreas to knit 37.25…

A: Given: Feasible for Andreas is to knit 37.25 pairs of mittens.   Mittens per hour Scarves per…

Q: 00t 08 ot Shelter 06 09 OS 50 45 Q, =5 40 or 35 15 Q, =10 30 25 25 Q, =15 20 Q, = 30 15 SE Q, = 20…

A: Production efficiency is the condition in the economy where slope of isoquant of goods are equal to…

Q: a) Distinguish between Cobb Douglas production function and Classical production function

A: Meaning of Microeconomics: The term macroeconomics refers to that situation under which the…

Q: Which of the following is a cause of diminishing marginal productivity? a.In the long run, labor…

A: Marginal Productivity  Marginal productivity or marginal product is the additional output, return,…

Q: The graph presented shows the initial output level, identify the expansion path? In a fixed…

A: The expansion path refers to the trajectory or path along which a firm or producer expands its…

Q: Choice land has 250 workers and produces only two goods, X and Y. Labouris the only factor of…

A: Production possibilities curve can be illustrate as follows: In above Figure, the vertical axis…

Q: Hours of work necessary to produce one unit of cloth or wine is shown in the following table:…

A: In economics, input refers to the production elements that are used to produce a good or a service.…

Q: Distinguish between economies and diseconomies of scale, ensuring to differentiate between internal…

A: The difference between economies and diseconomies of scale: In both the enterprises: public and…

Q: Find all of the capital and wage allocations between the two production units that are likely to be…

A: As given in the question: Units of labor = 50 Units of Capital = 30 Production Function: QT =…

Q: Consider a Robinson Crusoe's economy, where he has 10 hours to spend on gathering coconuts (L), or a…

A: Given: Production function: C=4L Utility function: u(C,R)=CR As per parts (a) and (b) The optimal…

Q: Question 15 Consider the following figure (The following is a description of the figure: it shows a…

A: The process of production is the combining of the raw materials and the skills and knowledge of the…

Q: In a production of armored shots to Ukraine the production function looks as follows: Q = KaL b…

A: As given information Q =KaLb Where b = 0.5  and a+b =1  so a = 0.5 Also price of capital Pk= 2 Price…

Q: Answer the question based on the following information: Suppose 30 units of product A can be…

A: A technological relation is used in the production produced by the input and output. It expresses…

Q: hich of the following statements are true? A basic assumption of the theory of production is that:…

A: The process of the combination of various material and immaterial inputs into output for the purpose…

Q: a. Under autarky (in absence of trade), a unit cost of labor (w) is $40 and a unit cost of capital…

A: The combination of factor-inputs that a firm uses to produce output is determined by the amount of…

Q: Which technique is economically most efficient in producing A?

A: We are given various combinations of labor and capital that can produce 15 units of Product A. In…

Q: If a good is labour intensive it means that no capital is used in the manufacturing of that good.…

A: The statement is false

Q: 1) A production technology is.. a) different combinations of inputs b) price and quantity of goods…

A: 1):In general, a good or service is produced by using labor and capital. Labor refers to the…

Q: If a factory produces 100 TV sets per year, each TV will be quite expensive to make. However, if a…

A: Average cost= Total cost/ Quantity.