II. Helping Conchita-Crem to minimize costsSuppose that the labor cost of Conchita-crem is $20 USD per hour, and the cost of capital is$5 USD per hour. Suppose the production function for conchas is q =10L/2K2a) José Antonio produces 1000 conchas. He is currently using 100 workers and 100ovens. Is he optimizing his use of inputs of production?b) What is the rule to optimize the use of inputs of production?c) Find the optimal level of labor and capital for Conchita-Crem. What is its total cost?d) Now suppose that the rental price of ovens for Conchita-Crem increases 100%.Would the production change? What would be now the rule to efficiently use inputsof production? How much labor and capital be used? What is the total cost now?Compare it to your answer in c.e) Find the input demand functions for capital and labor. Remember these functionsspecify the amount of labor or capital that Conchita-Crem will use as a function ofproduction level q.f) Suppose now that José Antonio would like to know the expansion path of his firmand his long-run costYou must use graphs to depict the scenario.rve. He wants to know that for up to 5,000 conchas produced.

“Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Suppose that the labor cost of Conchita-crem is $20 USD per hour, and the cost of capital is $5 USD per hour. Suppose the production function for conchas is q = 10L2K"/2 %3D a) José Antonio produces 1000 conchas. He is currently using 100 workers and 100 ovens. Is he optimizing his use of inputs of production? b) What is the rule to optimize the use of inputs of production? c) Find the optimal level of labor and capital for Conchita-Crem. What is its total cost?

Suppose that the labor cost of Conchita-crem is $20 USD per hour, and the cost of capital is $5 USD per hour. Suppose the production function for conchas is q = 10L2K"/2 %3D a) José Antonio produces 1000 conchas. He is currently using 100 workers and 100 ovens. Is he optimizing his use of inputs of production? b) What is the rule to optimize the use of inputs of production? c) Find the optimal level of labor and capital for Conchita-Crem. What is its total cost?

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

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
Consider the following production function for shirts: q = v6 L3/4K/4, where L is worker-hours, and K is sewing machine-hours. a. Compute the marginal products of labor and capital, the average product of labor, and the marginal rate of technical substitution of labor for capital (i.e. how many units of capital are needed to make up for the loss of one unit of labor)? b. Are there diminishing returns to labor (that is, does the marginal product of labor decrease when labor L increases)? What about to capital? Is there diminishing marginal rate of technical substitution (MRTS)? с.
13. Suppose you have a production technology given by f(x1, x2) = min{2x₁, x2} and you are producing at the point where x₁ = 10 and x₂ = 20. (a) Explain in words what we mean (generally) by the ‘marginal product' of an input in production. (b) For the production technology in this question and the initial point x₁ = 10 and x2 = 20, what is the marginal product of a small increase in input 1? (c) Suppose input 2 increases and you are now at the initial point x₁ = 10 and x2 = 30. Relative to your answer in part (b), does the marginal product of input 1 decrease, increase, or stay constant? Explain briefly.
2
Digging calms by hand in Sunset Bay requires only labor input. The total number of calms obtained per hour (q) is given by :Q = 100√LWhere L is labor input per hour. A. Graph the relationship between q an LB. What the average productivity of labor in Sunset Bay? Graph this relationship and show that output per unit of labor input diminishes for increase in labor input. C. It can be shown that the marginal productivity of labor in Sunset By is given by:MPL =50√LGraph this relationship and show that labor’s marginal productivity is less than average productivity for all values of L . Explain why this is do.D. Explain the concept of diminishing returns to labor and how this concept related to increasing marginal costs.
A production function is given by the following equation, where y is output, and x is input. Iny = 0.25 +0.4x When x is 5, what is y?
1
Problem 5 The production function of COVID vaccines for firm O is given by v° = VKL. and requires at least one unit of labor L and one unit of capital K, i.e. L>1 und K > 1. a) After a year and some thorough research, the production function changes to VO = V4KL. (I) Compute the marginal products with respect to labor L and capital K for both production functions ! (II) Which company's the marginal products is/are larger ? What happened to the original level of production after a year ? (III) Do the production functions exhibit increasing, constant or decreasing returns to scale ? b) Suppose now, we compare production functions of company O that discovered the vaccine to a second company M. The production function of M is given by VM = K0.6 L0.4 (I) Compute the marginal products with respect to labor L and capital K for this pro- duction function ! (II) If both companies used the same equal amount of labor L and capital K, which of them will generate more output ? (III) If the…
Please help me
Consider the following production functions and match them to the word that describes their returns to scale. Production function A: F(L,K) = K²L Production function B: F(L,K) = 25K + 10L Production function C: F(L,K) = (KL)¹2 Production function D: F(L,K) = 5L² + L¹/2K1/2 Production Function A✔ Choose... Decreasing Production Function B Constant Production Function C Increasing Production Function D Choose.. +
6
6