Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Question
Chapter 7, Problem 3E
a)
To determine
Range of workers which show increasing, constant, decreasing and negative returns.
b)
To determine
Number of crew to be employed to when trawler is interested in maximizing number of fish caught.
c)
To determine
Number of crew to be employed to when trawler is interested in maximizing average number of fish caught.
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Given Q=100k0.5L0.5 , C=1200 w=30 r=40
(a)Determine the quantity of labour and capital the firm should use in order to minimize the cost.
(b)What is the level of output at this level.
A research study published in Social Science Medicine, “Production Functions for General Hospitals,” estimated the following general hospital production function in the Netherlands: Q = 5*Staff.34*Beds.64*Drugs.04*Specialists.02, where Q is a measure used by the authors for patient care. Suppose a hospital currently utilizes the following inputs: Staff =20, Beds = 120, Drugs = 60, Specialists =10. Use a spreadsheet to find the following or otherwise. If the hospital increases its specialists by one (1), that is, employs an 11th specialist, the increase in Q (marginal product) will be:
Given Q=100kL0.5 , C=1200 w=30 r=40
(a)Determine the quantity of labour and capital the firm should use in order to minimize the cost.
Chapter 7 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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- Craig and Javad run a paper company. Each week they need to produce 1,000 reams of paper to ship to their customers. The paper plant's longrun production function is Q = 4KL, where Q is the number of reams produced, K is the quantity of capital rented, and L is the quantity of labor hired. The weekly cost function for the paper plant is C = 20K + 4L, where C is the total weekly cost. (a) What ratio of capital to labor minimizes Craig and Javad's total costs? (b) How much capital and labor will Craig and Javad need to rent and hire in order to produce 1,000 reams of paper each week? (c) How much will hiring these inputs cost them?arrow_forwardGiven Q=100K^0.5L^0.5 ,w= 30, r=40 i) Find the quantity of labour and capital that the firm should use in order to minimize the cost of producing 1444 units of output ii) What is this minimum cost?arrow_forwardA firm has production function F(K, L) = 1/4 (K1/2 + L1/2) . The wage rate is w = 1 and the rental rate of capital is r = 3. (a) How much capital and labor should the firm employ to produce y units of output? (b) Hence find the cost of producing y units of output (the firm’s cost function). (c) Differentiate the cost function to find the marginal cost, and verify that it is equal to the value of the Lagrange multiplierarrow_forward
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