Suppose a firm uses only capital and labor for production. It takes input prices as ven at r= 6 and w = 3. Draw isocosts curves for the case that total costs are ual to C = 6 and for the case that C is. = 9 putting the level of labor on the vertical

Suppose a firm uses only capital and labor for production. It takes input prices as ven at r= 6 and w = 3. Draw isocosts curves for the case that total costs are ual to C = 6 and for the case that C is. = 9 putting the level of labor on the vertical

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Show using math and logic that for constant returns to scale production functions, MRTS between labor and capital depends only on the K/L ratio, and not the scale of production.
A firm's production function is q = 26x^0.33y^0.67, where x and y are the amounts of factors x and y that the firm uses as inputs. If the firm is minimizing unit costs and if the price of factor x is 6 times the price of factor y, the ratio in which the firm will use factors x and y is closest to. A. x/y = 0.08 B. x/y = 0.25 C. x/y = 0.5 D. x/y = 2.4
Suppose that a firm’s production function is Q =10 K^(3/4)L^(1/4). The cost of a unit of labor is $1 and the cost of a unit of capital is $3. The manager of this firm is interested in finding the following information: a) Type of returns to scale and the marginal products of labor and capital. b) The marginal rate of technical substitution of labor for capital. Graph the isoquant map. c) The firm is currently producing 100 units of output. Find the optimal cost-minimizing quantities of labor and capital. Graphically illustrate this optimal solution using isoquants and isocost lines. What is the minimum total cost? d) The manager now wants to know the K/L ratio to produce anyoutput level at the minimum total cost. Represent graphically the expansion path in the long run.
The marginal product of labor can be determined using the total product of labor curve. Using the equation for the production function, the level of output when L = 8 and K = 25 is (3) 2³. (Enter a numeric response using a real number rounded to two decimal places). q=8LK+5L² Product or Output (q) 3,500- 3,000- 2,500- 2,000- 1,500- 1,000- 500- 0- Production Function 5 2 :8 15 15 10 Labor Input (L) 20 25
If the production function is f(x1,x2) = x1,x2.a. Show whether this production function exhibits increasing, decreasing or constant returns to scale.b. Show whether the average cost is increasing, decreasing or constant.
Suppose that the production function for Hannah and Sam's home remodeling business is Q = F(L,K) Q = 10L0.1K0.4.Assume the wage rate is $8,000 per week and the cost of renting a unit of capital is $1,000 per week.a. What is the least-cost input combination for remodeling 400 square feet each week? Instructions: Round your answers to 2 decimal places. units of labor and units of capital. b. What is the total cost? Instructions: Round your answer to 2 decimal places. $ .revised jrl 08-11-2011
a. A firm's long-run total cost can be written as LTC = 3000Q - 50Q2 + (1/3)Q3 and its long-run marginal cost by LMC = 3000 - 100Q + Q2. Find the range over which the firm will experience economies of scale. Explain your answer. b. A firm has a production function of Q = K * L + L, where the marginal product of labor is MPL = K + 1 and the marginal product of capital is MPK = L. The wage rate (W) is $100 per worker and the rental price (R) is $100 per unit of capital. In the short-run, capital (K) is fixed at 4. Find the minimum total cost of production in the short- and long-run if the firm produces 100 units of output.
Suppose that a firm's production function is Q = F(L) = -1L³-30L² + 5,000L. Its marginal product of labor is MPL = -3L2-60L +5,000. a. At what amount of labor input are the firm's average and marginal product of labor equal (other than at L = 0)? Instructions: Enter your answer as a whole number. units. b. Confirm that the average and marginal product curves satisfy the relationship discussed in the text. When the amount of labor input is less than the quantity identified in your answer above, the marginal product of labor is greater than the average product of labor. When labor is greater than the amount identified above, the marginal product of labor is less than the average product of labor.
4. Ikea Inc., a home remodeling business. The number of square feet they can remodel in a day is described by the Cobb-Douglas production function Q= F (L,K)= 4K5L0.5 where L is their number of workers and K is units of capital. The wage rate is $5 a day, and a unit of capital costs $20 a day. What is their minimum cost input combination for remodeling (Q=200) 200 square feet a day? What is the total minimum cost level? (15p)
Does the production function y=0.8x_1x_2 exhibit constant returns to scale, increasing returns to scale, decreasing returns to scale, or homothetic returns to scale
can you explain the solution for part b like for example how did they get M=y^2/2 and L=2y^2
Hi, please help with the question