The price of capital is $400 per unit. The price per unit of labour is $ The minimum cost of producing 1,200 units of output is $ To produce 1,200 units of output at the least cost the firm should use units of labour. The Marginal Rate of Technical Substitution at each cost minimizing equilibrium point is If the firm decides that total cost must not exceed $30,000, the maximum amount of output it can produce is To produce 800 units of output at the least cost the firm should use units of capital.

The price of capital is $400 per unit. The price per unit of labour is $ The minimum cost of producing 1,200 units of output is $ To produce 1,200 units of output at the least cost the firm should use units of labour. The Marginal Rate of Technical Substitution at each cost minimizing equilibrium point is If the firm decides that total cost must not exceed $30,000, the maximum amount of output it can produce is To produce 800 units of output at the least cost the firm should use units of capital.

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

A firm has the production function Q(L, K) = √K + 2√L. The price of one unit of capital is R > 0, and the price of one unit of labor is W > 0. Which of the following statements is correct? The production function can be represented by a CES production function [aLº +6K²] for suitable values of b and p. a₂ The marginal rate of technical substitution is MRT Sık (L, K): 2√L √K O If W = R, the fi rm's demand for labor is four times the demand for capital. O The production function has increasing returns to scale.
The Director of ABC Enterprise hires labour (L) and rents capital equipment (K) in a competitive market to produce mango juice. At the moment, the wage rate of labour is GH¢2 per hour and capital is rented at GH¢5 per hour. Also, the unit price of mango juice is GH¢0.75 and total cost of production is GH¢1,000. Suppose the firm’s production function (Q) follows a Cobb-Douglas specification given as: 0.5 0.5 ?=14? ? +10 Determine the optimal input usage and the maximum profit that ABC Enterprise would obtain at the optimal input levels.
Assume the following production function: q = √k + √la) Determine the cost function and the contingent input demand functions. b) If the firm’s output target is 1000 units and the prices per unit of capital and labour are 30 and 10, respectively, what will the firm’s cost be? What will its demand for capital and labour, respectively, be? c) Determine the rate of technical substitution and sketch the isoquant map corresponding to the production function.
The following table shows the capital and labor requirements for 10 different levels of production. Assuming that the price of labor (PL) is $8 per unit and the price of capital (PK) is $6 per unit, compute and graph total cost, marginal cost, and average cost for the firm. To do this, fill in the total cost for each output level in the table below. (Enter your responses as whole numbers.) 9 0 1 2 3 4 5 6 7 8 9 10 K 0 20 20 20 20 20 20 20 20 20 20 L 0 3 7 10 13 17 23 31 41 53 67 TC 0 Cost per unit ($) 0 1 2 3 4 5 6 7 8 9 10 11 12 Units of output Q ✔
Which of the following statements is (are) TRUE?I. If labor and capital are perfect substitutes in production, the isoquant is a downward-sloping line.II. If a company needs to use inputs in fixed proportion such that the capital to labor ratio is always 2, the firm's isoquants are L-shaped.III. If the production function is given by Q = min(14, 7), the firm can produce, at minimum, 21 units of output. IIII, II, and IIIII and II Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
A firm produces basketballs with two variable inputs - labour (L) and plastic (K) - and has the following production function: f (L , K) = 6L1/3K1/6 If the price of output is 4, the price of labour is $2 and the price of plastic is $3, calculate the a) profit-maximizing level of each input b) the total production and c) the profit.
Output is produced according to production function y = f (L, M) = L2 M2, where L is the number of units of labor and M is the number of machines used. The cost of labor is $w per unit and the cost of machines is $p per unit. a) Draw a graph showing the cost-minimizing input bundle as a tangent point between the isoquant curve and an isocost line. b) Find marginal products MPL and MPM as functions of L and M. c) Use the slope condition for tangent point and the production function to solve for the conditional input demand functions L(w, p, y) and M(w, p, y). DRAW THE GRAPH AND SHOW YOUR WORK
Suppose the production of Scooby Snacks at x units of labor and y units of capital is given by the Cobb-Douglas production function P(x, y) = kx"y" where m, n, k are known positive constants and m+ n = 1. The company can spend only p dollars for the production of Scooby Snacks. The cost of one unit of labor is b dollars, while the cost of one unit of capital is c dollars. Using Lagrange multipliers, find an expression for x and y where maximum production will occur?
Lesson 8 - Costs Question 3
Con Co. produces a collectible card game. Currently, the price of capital is at $50 and the price of labor is at $10. The marginal product of capital is 200 and the marginal product of labor is 30. To minimize cost of the given output, Con Co. should Use more capital Use more capital and labor Leave capital and labor as is Use more labor
Please type the answer, and answer both questions.
For each of the following cases, determine whether the firm should (A) Use more labor and less capital, or (B) Use more capital and less labor. 1. The marginal rate of technical substitution is 2 (i.e., the marginal product of labor is twice the marginal product of capital) and the input price ratio is 3 (i.e., a unit of labor costs three times as much as a unit of capital) 2. The marginal rate of technical substitution is 2 (i.e., the marginal product of labor is twice the marginal product of capital) and the input price ratio is 1 (i.e., a unit of labor costs the same as a unit of capital) 3. The marginal rate of technical substitution is initially equal to the input price ratio, but the firm's machines depreciate, so that the marginal product of capital decreases. 4. The marginal rate of technical substitution is initially equal to the input price ratio, but the firm successfully negotiates a lower rate of rent for their machines, so that the price of capital decreases. 5. The…