Question 40Givens:minw * L+r * KL>0, K >0s.t.• The marginal product of labor: MPL = .5 * *• The marginal product of capital: MPK = .5*• Baseline Scenario: w = $10, r = $10 and go = 200• New Scenario: w = $10, r = $2.50 and go = 200Equation Description: A firm is attempting to minimize total cost subject to sufficiently employing units of labor and units of capital to produce an output level at least as large as a specified output quota. Total cost equals the cost to employing units of laborplus the cost to employing units of capital. A firm's production function is the product of two terms: the first term is units of capital raised to the .5 power; and, the second term is units of labor raised to the .5 power. The marginal product of labor equals theproduct of three terms: the first term is .5; the second term is units of capital raised to the .5 power; the third tem is units of labor raised to the -.5 power. The marginal product of capital equals the product of three terms: the first term is .5; the second term isunits of labor raised to the .5 power; the third term is units of capital raised to the -5 power. As a baseline scenario: The wage rate is $10 per unit of labor; the rental rate is $10 per unit of capital; and, the output quota is 200 units. As a new scenario: The wagerate is $10 per unit of labor; the rental rate is $2.50 per unit of capital; and, the output quota is 200 units.Question: Comparing the baseline scenario to the new scenario, how did the new event affect total cost?O Cannot be determined.O Total cost remained unchanged.O Total cost decreased.O Total cost increased.

A production function illustrates the relationship between the output and the inputs used. It…

Answered: Givens: w * L+r+K min L>0, K > 0 s.t. %

Business

Economics

Givens: w * L+r+K min L>0, K > 0 s.t. %

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Time left 1:30:35 Suppose you are given the following output and (incomplete) cost table (assume labor is the only variable input and that all workers are paid an equal wage rate): Labor Output 0 0 2 3 4 100 units 270 units 570 units 650 units Fixed Cost Variable Cost C. a. an amount less than $15 b. an amount between $15 and $25 an amount between $25 and $35 d. an amount between $35 and $45 e. an amount greater than $45 Total Cost $50,000 Average Variable Cost undefined What is marginal cost when the third worker is employed? $61.53
help! rate will be given! write the solutions legibly and correctly. ECONOMICS
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hedule detailing the weekly total production of per week, and the cost of each unit of capital is tz uolzsano C