If the production function is F(K,L) = A * K0.4L0.6 then the Marginal Rate of Technical Substitution of K for L: is 0.6 0.4 O depends on the amounts of (K,L) O depends on A O is 0.6 O is 0.4 0.6 O is 0.4

If the production function is F(K,L) = A * K0.4L0.6 then the Marginal Rate of Technical Substitution of K for L: is 0.6 0.4 O depends on the amounts of (K,L) O depends on A O is 0.6 O is 0.4 0.6 O is 0.4

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter21: Production And Costs

Section21.4: Costs Of Production: Total, Average, Marginal

Problem 3ST

See similar textbooks

Similar questions

What is the difference between a fixed input and a variable input?
Does the value of λ change if the budget changes from $4600 to $5600?What condition must a Cobb-Douglas production function q = cKαW β satisfy toensure that the marginal increase of production is not affected by the size of thebudget?
A firm can manufacture a product according to the production function Q = F(K, L) = K0.5L0.5. (a) What is the average product of labor, APL, when the level of capital is fixed at 36 units and the firm uses 16 units of labor? (b) What is the marginal product of labor, MPL, when capital is fixed at 36 units? (c) Suppose capital is fixed at 36 units. If the firm can sell its output at a price of $100 per unit of output and can hire labor at $40 per unit of labor, how many units of labor should the firm hire in order to maximize profits?
Derive formulae for the marginal products of the three inputs in the produc- tion function Q = 40K03L0.3R04. %D
Suppose the production function is Cobb-Douglas and f(x1,x2)) = x11/2x3/221. Write an expression for the marginal product of x1.2. Does marginal product of x1 increase for small increases in x1, holding x2 fixed? Explain3. Does an increase in the amount of x2 lead to decrease the marginal product of x1? Explain4. What is the the technical rate of substitution between x2 and x1?5. What is the type of returns to scale of this production function? (Increasing, decreasing,constant)
Consider the production function Q = 10KL. Will the MRTS for this production function remain constant along the Q = 200 isoquant? Explain briefly. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 三v A v In BIUS Paragraph Arial 10pt 田田田田 EX + x' X2
Let the production function be given by q=2(square root of L)(square root of K)} and Price of K be 5 and the Price of L be 2. Then, the slope of the isoquant is given by: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a: -L/K b: -K/L c: -(K+L) d: -(KL) e: none of the above
Suppose the production function is Cobb-Douglas and f(x1;x2)=x11/2x23/2 Write an expression for the marginal product of x1. Does marginal product of x1 increase for small increases in x1, holding x2 fixed? Explain Does an increase in the amount of x2 lead to decrease the marginal product of x1? Explain What is the the technical rate of substitution between x2 and x1? What is the type of returns to scale of this production function? (Increasing, decreasing, constant)
Ten-year old Sarah is starting a lemonade stand, she uses baskets of lemons (L) and other ingredients (O). She is able to produce lemonade according to the production function f(L, O) = 1 2 L 2O. The cost of a basket of lemons is $10 and the average cost of the other goods is $4. (a) Derive MPL and MPO. (b) Currently Sarah is using 4 baskets of lemons and 40 units of the other goods. Using this information, calculate MPL and MPO. (c) True/False. At her current use of inputs Sarah is minimizing costs. If true, explain why. If false, what would you recommend Sarah do? (d) Sarah wants to produce 320 units of lemonade. Determine the cost minimizing combination of inputs to use. (e) Assuming no changes in the market price of lemonade nor in the prices of the inputs, if Sarah continues to produce 320 units of lemonade in the long run, what will Sarah’s long run costs be.
If the production function is F(K,L)=A∗K0.4L0.6 then what is the marginal rate of technical substitution
1/3 1/3 Farmer Joe's production function is f(x1, x2) = ", where xị is the number of pounds of lemons he uses and x2 is the number of hours he spends 1/21/2 2wi"wy3/2, where y is the squeezing them. His cost function is c(w1. w2, y) = number of units of lemonade produced. (a) If lemons cost $1 per pound, the wage rate is $1 per hour, and the price of lemonade is p, what is his marginal cost function?
A firm produces plastic bins using labor (measured in man-hours) and capital (measured in machine-hours), according to the production function Q = f(L,K) = LK, where Q is the number of plastic bins produced. Suppose that the cost of labor is $20 per worker-hour and the cost of capital is $10 per machine-hour. What is the cost minimizing input combination if the firm wants to produce 28,800 plastic bins? Hint: The marginal products are MP, = K and MPg = L.