A firm has the production function ?= ?1/3?2/3.Does this production function have upper and lower ridge...
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- A firm has the production function ?= ?1/3?2/3.Does this production function have upper and lower ridge lines? If no, explain why. If yes, derive the equations of upper and lower ridge lines.
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- Now suppose that a different production function is given as: ?= 12−(27−?)1/3(8−?)2/3 where L and K is nonnegative. Does this production function have upper and lower ridge lines? If no, explain why. If yes, derive the equations of upper and lower ridge lines.
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- Suppose that the wage rate W is $4 and the rental price R is $8. Derive the equation of expansion path of two production function given in (a) and (b) above.
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A firm has the production function ?=
?1/3?2/3.Does this production function have
upper and lower ridge...
a. A firm has the production function X =L^1/3K^2/3. Does this production function have upper and...
a. A firm has the production function X =L^1/3K^2/3. Does this production function have upper and lower ridge lines? If no, explain why. If yes, derive the equations of upper and lower ridge lines. b. Now suppose that a different production function is given as: X=12−(27−L)^1/3(8−K)^2/3 where L and K is nonnegative. Does this production function have upper and lower ridge lines? If no, explain why. If yes, derive the equations of upper and lower ridge lines. c. Suppose that...
Suppose that a companies production function is given by: f(L;K) = (10K^3L^2)/(L+K) a) Does this production...
Suppose that a companies production function is given by: f(L;K) = (10K^3L^2)/(L+K) a) Does this production function exhibit increasing, constant, or decreasing returns to scale? Algebraically justify your answer. b) If there is a wage of 10 and a rental rate of capital of 1, then find the company's expansion path.
4. Suppose that in the short run a firm has a production function relating workers to...
4. Suppose that in the short run a firm has a production function relating workers to output per hour: Q = 10L Where L is hours of labor. Suppose also that the firm sells its product in a perfectly competitive output market, at a price of $8 per unit produced a. Suppose that the firm is a monopsonist in the labor market, facing a labor supply curve that can be written as: L = 2W (for W = wage per...
A firm has a Cobb-Douglas production function of Q = K^(0.25) L^(0.75) (a) Does this production...
A firm has a Cobb-Douglas production function of Q = K^(0.25) L^(0.75) (a) Does this production technology exhibit increasing, constant, or decreasing returns to scale? (b) Suppose that the rental rate of capital is r = 1, the wage rate is w = 1, and the ?rm wants to produce Q = 3. In the long-run, what combination of L and K should they use? (It would be good to practice doing this with the Lagrangian, even if you can...
Part I: Long-Run Production and Cost Functions (12 points) Suppose the production function of a firm...
Part I: Long-Run Production and Cost Functions (12 points) Suppose the production function of a firm is given by q Lo.5 K0,5. The prices of labor and capital are given by w 2 and r 5, respectively. a) Write the firm's cost minimization problem formally. b) What returns to scale does the production function exhibit? Why? c) What is the optimal capital to labor ratio? Show your work. d) What is the slope of the expansion path and what is...
1. Consider a firm which produces according to the following production function by using labor and...
1. Consider a firm which produces according to the following production function by using labor and capital: f(1,k) = klid (e) Suppose the wage rate of labor is 2 TL, the rental rate of capital is 2 TL and fixed capital input, k, is 2 units. What amount of output minimizes short-run average cost? What is the minimum possible short-run average cost? (f) Find short-run firm supply as a function of input prices, w and v, and output price, p....
Question 2: A firm producing hockey sticks has a production function given by q= 8k0.5l 0.5...
Question 2: A firm producing hockey sticks has a production function given by q= 8k0.5l 0.5 In the short run, the firm’s amount of capital equipment is fixed at k=25. The rental rate for k is v=$1 and the wage rate for l is w=$4. (a) Calculate the firm’s total cost function, average cost function and marginal cost function in the short run. (b) What are the SC, SAC and SMC for the firm if it produces 25 hockey sticks?...
Suppose that a firm had a production function given by q-21 K The rental rate for...
Suppose that a firm had a production function given by q-21 K The rental rate for the fim is $10 and the wage is s5 Solve the optimization condition for K and then fill in the value that appears in front of L K- Round to the nearest 2 decimal places if necessary.) Suppose that a firm had a production function given by q-L025k075. The wage rate (w) is $10 and the rental rate () is $10 Calculate the amount...
A firm has a production function Y = 2 Ko5L05 use w to denote the wage...
A firm has a production function Y = 2 Ko5L05 use w to denote the wage rate and r to denote the capital rental price. Let us first consider the short run situation, where the firm has K = 25 and r = 2. In order to produce 10 units of output, how many units of labour does the firm need to hire? What is the average cost of the firm? a. b. Let us first consider the short run...
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S:...
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S: where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 1 kg of kiwi fruits and 3 hours of labour, he can produce 1 bottle of juice a) Draw isoquants for q, q 2 and q 3 on a diagram with labour on horizontal axis and kiwi fruits on vertical b) Let the price...
Part I: Long-Run Production and Cost Functions (12 points) Suppose the production function of a firm is given by q Lo.5 K0,5. The prices of labor and capital are given by w 2 and r 5, respectively. a) Write the firm's cost minimization problem formally. b) What returns to scale does the production function exhibit? Why? c) What is the optimal capital to labor ratio? Show your work. d) What is the slope of the expansion path and what is...
1. Consider a firm which produces according to the following production function by using labor and capital: f(1,k) = klid (e) Suppose the wage rate of labor is 2 TL, the rental rate of capital is 2 TL and fixed capital input, k, is 2 units. What amount of output minimizes short-run average cost? What is the minimum possible short-run average cost? (f) Find short-run firm supply as a function of input prices, w and v, and output price, p....
Suppose that a firm had a production function given by q-21 K The rental rate for the fim is $10 and the wage is s5 Solve the optimization condition for K and then fill in the value that appears in front of L K- Round to the nearest 2 decimal places if necessary.) Suppose that a firm had a production function given by q-L025k075. The wage rate (w) is $10 and the rental rate () is $10 Calculate the amount...
A firm has a production function Y = 2 Ko5L05 use w to denote the wage rate and r to denote the capital rental price. Let us first consider the short run situation, where the firm has K = 25 and r = 2. In order to produce 10 units of output, how many units of labour does the firm need to hire? What is the average cost of the firm? a. b. Let us first consider the short run...
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function 1S: where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 1 kg of kiwi fruits and 3 hours of labour, he can produce 1 bottle of juice a) Draw isoquants for q, q 2 and q 3 on a diagram with labour on horizontal axis and kiwi fruits on vertical b) Let the price...
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