Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week isdescribed by the Cobb-Douglas production functionQ = F(L, K)Q = 10L0.25 K0.25where Lis their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 perweek. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital.a. What is their short-run cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.b. What is their short-run average cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.c. What is their long-run cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.d. What is their long-run average cost of remodeling 100 square feet per week?Instructions: Round your answer to the nearest whole number.%24%24

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Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q = F(L, K) Q = 10L0.25 K0.25 where L is their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 per week. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital. a. What is their short-run cost of remodeling 100 square feet per week?

Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q = F(L, K) Q = 10L0.25 K0.25 where L is their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 per week. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital. a. What is their short-run cost of remodeling 100 square feet per week?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is
described by the Cobb-Douglas production function
Q = F(L, K)
Q = 10L0.25 K0.25
where Lis their number of workers and K is units of capital. The wage rate is $160 per week and a unit of capital costs $100,000 per
week. Suppose that when initially producing 10 square feet a week, they use 0.04 unit of capital.
a. What is their short-run cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
b. What is their short-run average cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
c. What is their long-run cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
d. What is their long-run average cost of remodeling 100 square feet per week?
Instructions: Round your answer to the nearest whole number.
%24
%24

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Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q=F(L,K) Q=10L^0.5K^0.5,where L is their number of workers and K is units of capital. The wage rate is $250 per week and a unit of capital costs $250 per week. Suppose that when initially producing 100 square feet a week, they use 10 units of capital.a. What is their short-run cost of remodeling 1,000 square feet per week? Instructions: Enter your answer as a whole number. $ b. What is their long-run cost of remodeling 1,000 square feet per week? Instructions: Enter your answer as a whole number. $
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Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q=F(L,K) Q=10L^0.25 K^0.25 where L is their number of workers and K is units of capital. The wage rate is $500 per week and a unit of capital costs $500 per week. Suppose that when initially producing 10 square feet a week, they use 1 unit of capital.a. What is their short-run cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ b. What is their short-run average cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ c. What is their long-run cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ d. What is their long-run average cost of remodeling 80 square feet per week? Instructions: Round your answer…
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