EconomicsPart 1O See HintA firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cobb-Douglas production function:y = f(L, K) = L0.25 K0.75Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical axis, what is the slope of this firm'sisoquant when L = 120 and K = 60? Give your answer to two decimal places and remember that the sign matters when describingthe slope of an isoquant.Part 2O See HintAssume that L = 120 and K = 60 and suppose that the firm decides to reduce its use of capital and replace those machine hours withsome additional labor hours. Approximately how many labor hours will the firm need to add for each machine hour it cut in order tomaintain the same level of output (i.e., stay on the same isoquant)? Give your answer to two decimal places. Ilabor hours

1. The isoquant will be, L0.25K0.75=c (1). Slope of this firm's isoquant is equal to dKdL at…

Part 1 A firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cob y = f(L, K) = L0.25 K0.75 Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical isoquant when L- 120 and K - 60? Give your answer to two decimal places and remember tbat t

Part 1 A firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cob y = f(L, K) = L0.25 K0.75 Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical isoquant when L- 120 and K - 60? Give your answer to two decimal places and remember tbat t

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 13RQ: What is the difference between a fixed input and a variable input?

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se The marginal product of labor can be determined using the total product of labor Production Function curve. 3,500- se Using the equation for the production function, 3,000- 3 2 q= 8LK + 5L2 – 2,500- see the level of output when L= 5 and K= 25 is (Enter a numeric response using 2,000- a real number rounded to two decimal places). 3 1,500- When labor is 5 units and K is 25, the marginal product of labor is 1 1,000 *** When labor increases to 12 units and K is 25, the marginal product of labor is 500 - 12 10 15 Labor Input (L) 15 20 25 DEC 25 tv 20 MacBook Air DII SO F10 F11 F9 F3 F4 * %23 $ & 4 6 8 { } E Y U P D F G н J K > C V N M command option - - ... .- V Product or Output (g) B R
Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm is producing in the short run, capital is fixed at K but capital is variable in the long run. K, Capital K A B Q3 Isoquant Q2 Isoquant Q₁ Isoquant L, Labour Which of the following can we conclude? O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, B and C represent cost minimisation in the long run only. There are no points that represent cost minimisation in both the short run and the long run. Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only. Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in…
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The short-run production function for a manufac- turer of wireless earbuds is shown in the table below. Based on this information, answer the fol- lowing questions. Input of Labor (workers per week) Total Output of Wireless Earbuds 1 25 2 60 3 85 4 105 115 6 120 a. Calculate the average product at each quantity of labor. b. Calculate the marginal product of labor at each quantity of labor. c. At what point does marginal product begin to diminish?
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