MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
11th Edition
ISBN: 9781264207718
Author: Colander
Publisher: MCG CUSTOM
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Chapter 12.A, Problem 6QE
To determine
Graphically illustrate the given example
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A firm is attempting to maximize output given a budget. Draw a graph that illustrates the output-maximizing input combination. Suppose the cost of capital decreases. Show the new isocost line and the new output-maximizing combination of inputs.
Problem 1: Winter melons
A farmer is using land and fertilizer to produce winter melons. The production function is q = L√F.
The price of one unit of land is 3, the price of unit of fertilizer is 1. The farmer is currently using 4 units of
land and 4 units of fertilizer.
b) Suppose now that the farmer cannot modify the amount of land but can modify the amount of fertilizer.
Write the cost function.
c) The farmer can bring the winter melons to a market and sell them at price 1. Find the optimal
quantity to produce. Show that the profit is negative.
d) Suppose that now the farmer can buy more land. Do you think that, after buying sufficiently many
units of land, the farmer can eventually make a positive profit on the market?
Suppose a firm uses a single input to produce a single output according to a
production function f(x) = 10√x where x is the number of units of input. The
output initially sells for £120 per unit. The input costs £20 per unit. A change
in the market causes the product price to increase from £120 per unit to £200
per unit, all else equal. How does this change in product price affect the firm's
profit maximizing level of profits?
a. Profits increase by £16,000
Ob. Profits do not change
Profits increase by £8,000
d. None of the other answers is correct
Profits increase by £9,000
f. Profits increase by £18,000
g. Profits increase by £50,000
h. Profits increase by £32,000
C.
e.
Chapter 12 Solutions
MICROECONOMICS (LL)-W/ACCESS >CUSTOM<
Ch. 12.1 - Prob. 1QCh. 12.1 - Prob. 2QCh. 12.1 - Prob. 3QCh. 12.1 - Prob. 4QCh. 12.1 - Prob. 5QCh. 12.1 - Prob. 6QCh. 12.1 - Prob. 7QCh. 12.1 - Prob. 8QCh. 12.1 - Prob. 9QCh. 12.1 - Prob. 10Q
Ch. 12.A - Prob. 1QECh. 12.A - Prob. 2QECh. 12.A - Prob. 3QECh. 12.A - Prob. 4QECh. 12.A - Prob. 5QECh. 12.A - Prob. 6QECh. 12.A - Prob. 7QECh. 12 - Prob. 1QECh. 12 - Prob. 2QECh. 12 - Prob. 3QECh. 12 - Prob. 4QECh. 12 - Prob. 5QECh. 12 - Prob. 6QECh. 12 - Prob. 7QECh. 12 - Prob. 8QECh. 12 - Prob. 9QECh. 12 - Prob. 10QECh. 12 - Prob. 11QECh. 12 - Prob. 12QECh. 12 - Prob. 13QECh. 12 - Prob. 14QECh. 12 - Prob. 15QECh. 12 - Prob. 16QECh. 12 - Prob. 17QECh. 12 - Prob. 1QAPCh. 12 - Prob. 2QAPCh. 12 - Prob. 3QAPCh. 12 - Prob. 4QAPCh. 12 - Prob. 5QAPCh. 12 - Prob. 1IPCh. 12 - Prob. 2IPCh. 12 - Prob. 3IPCh. 12 - Prob. 4IPCh. 12 - Prob. 5IPCh. 12 - Prob. 6IP
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