A textile company has the production function Q = min{0.25K, 0.5L}, where K is units of...
A textile company has the production function Q =
min{0.25K, 0.5L}, where K is units of
capital and L is hours of labor.
a. Without
any warning, the price of capital doubles. What should this textile
company do in response?
b. If
this textile company were planning a new plant, would there be any
advantages to a larger facility?
Homework Answers
A)Since the production function is Leontief production function, any increase in price of capital will not change the demand of any input because there is zero substitution effect
B) No because these textile company represent constant return to scale. Thus any increase in plant size or adding a new plant will not work
Add Answer to:
A textile company has the production function Q =
min{0.25K, 0.5L}, where K is units of...
Priyanka's company has the production function Q=100K^0.5L^0.5, where Q measures output, K measures machine hours, and...
Priyanka's company has the production function Q=100K^0.5L^0.5, where Q measures output, K measures machine hours, and L measures labor hours. Suppose that the rental rate of capital is R=$30, the wage rate is W=$15, and the firm wants to produce 5,000units of output. Use the Lagrange method to find the optimal input mix. What the optimal level of K & L?
Tiffany's company has the production function Q=2K^0.5L^0.5, where Q measures output, K measures machine hours, and...
Tiffany's company has the production function Q=2K^0.5L^0.5,
where Q measures output, K measures machine hours, and L measures
labor hours. Let the wage rate be W, and suppose that the rental
rate of capital is R=$20 and the firm wants to produce 400 units of
output. Use the Lagrange method to find the demand curve for labor
as a function of the wage rate. Your answer will have L on the left
hand side of the equation. On the right...
Draw the isoquant of following production function and indicated level of output. Q=min(2L,0.5L+0.5K,K) Q=4
Draw the isoquant of following production function and indicated level of output. Q=min(2L,0.5L+0.5K,K) Q=4
Suppose a firm’s production function is given by q = min{3K,6L}, where K is capital and...
Suppose a firm’s production function is given by q = min{3K,6L}, where K is capital and L is labor. If the wage increases, what happens to the firm’s use of labor in production (relative to capital)? Explain.
Suppose the firm's production function is Q = 2KL where Q is units of output, K...
Suppose the firm's production function is Q = 2KL where Q is units of output, K is units of capital (which are fixed at 2), and L is units of labor. a. What is the firm’s short-run production function? b. Over the labor input usage range of 0 to 5, that is L ranging from 0 to 5, graph the firm’s Total Product curve. c. Derive and graph the firm’s Average Product curve and the Marginal Product curve. Graph/plot them...
Aamir's company has the production function Q=8K^0.75L^0.25, where Q measures output, K measures machine hours, and...
Aamir's company has the production function Q=8K^0.75L^0.25, where Q measures output, K measures machine hours, and L measures labor hours. Suppose that the rental rate of capital is R=$120, the wage rate is W=$20, and the firm wants to produce 800 units of output. Use the Lagrange method to find the optimal input mix. What the optimal level of K?
A firm has a production function of Q=20K^.2*L^.8 where Q measures output, K represents machine hours,...
A firm has a production function of Q=20K^.2*L^.8 where Q measures output, K represents machine hours, and L measures labor hours. If the rental cost of capital (r) equals $15 the wage rate (w) equals $10, and the firm wants to produce 40,000 units of output, how much labor and capital should the firm use?
Suppose the production function for automobiles is ? = ?? where Q is the quantity of...
Suppose the production function for automobiles is ? = ?? where Q is the quantity of automobiles produced per year, L is the quantity of labor (man-hours) and K is the quantity of capital (machine hours). a) What is the total product (number of automobiles) if the firm uses 25 man hours and 2 machine hours? b) Sketch the isoquant corresponding to a quantity of Q=50. c) What is the general equation for the isoquant corresponding to any level of...
7. For the production function q= min(K, 4L) (a) Assume that capital K is fixed at...
7. For the production function q= min(K, 4L) (a) Assume that capital K is fixed at 100 units. Derive and plot Page 2 of . The total product function q(L) ii. The marginal product function MPL(L) ii. The average product function AP(L) (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short...
7. For the production function q min(K,4L ): (a) Assume that capital K is fixed at...
7. For the production function q min(K,4L ): (a) Assume that capital K is fixed at 100 units. Derive and plot: i, The total product function q(L) ii. The marginal product function MPL(L). iii. The average product function APL(L). (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short run average cost....
Tiffany's company has the production function Q=2K^0.5L^0.5,
where Q measures output, K measures machine hours, and L measures
labor hours. Let the wage rate be W, and suppose that the rental
rate of capital is R=$20 and the firm wants to produce 400 units of
output. Use the Lagrange method to find the demand curve for labor
as a function of the wage rate. Your answer will have L on the left
hand side of the equation. On the right...
7. For the production function q= min(K, 4L) (a) Assume that capital K is fixed at 100 units. Derive and plot Page 2 of . The total product function q(L) ii. The marginal product function MPL(L) ii. The average product function AP(L) (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short...
7. For the production function q min(K,4L ): (a) Assume that capital K is fixed at 100 units. Derive and plot: i, The total product function q(L) ii. The marginal product function MPL(L). iii. The average product function APL(L). (b) Suppose the price of labour w is $1 and the rental rate r is also $1. Derive and plot all cost functions; that is: i. Short run total cost. ii. Variable cost. iii. Fixed cost. iv. Short run average cost....
Most questions answered within 3 hours.
-
Octane, a component of gasoline, can undergo the following
combustion with an excess of oxygen gas:...
asked 24 minutes ago -
a bead slides without friction around a loop-the-loop. a) if the
bead is released from a...
asked 29 minutes ago -
The standard enthalpy change for the following reaction is
220 kJ at 298 K.
CuCl2(s) -->Cu(s)...
asked 2 hours ago -
Few people these days print photographs in paper. To develop a
film, a mix of various...
asked 4 hours ago -
Gayle runs at a speed of 4.30 m/s and dives on a sled, initially
at rest...
asked 5 hours ago -
In a survey of 3000 Americans aged 12 through 74 years, the
following makeup of the...
asked 5 hours ago -
A compound microscope consists of a 4× eyepiece & a 42×
objective 30 cm apart. Assuming...
asked 5 hours ago -
Pls,I would like you to write a 3 pages talking about the benefit
of women in...
asked 7 hours ago -
Continuous random variables X and Y have joint pdf fX,Y (x, y) =
x +(1/y^2) defined...
asked 7 hours ago -
QUESTION 27
Using the Standard Normal Table. What is the probability a
z-score is between -1.11...
asked 7 hours ago -
The critical angle for total internal reflection for diamond
(n=2.42) surrounded by water (n=1.33) is approximately...
asked 7 hours ago -
Find the mass of urea (CH4N2O) needed to prepare 51.3 g of a
solution in water...
asked 7 hours ago