A firm has the following production function: f(L,M) = L3/4M1/4 1. What is the firm's Technical...
A firm has the following production function: f(L,M) = L3/4M1/4
1. What is the firm's Technical Rate of Substitution?
2. What is the optimality condition that determines the firm's optimal level of inputs?
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A firm has the following production function: f(L,M) =
L3/4M1/4
1. What is the firm's Technical...
Problem 4: A firm has the following production function: Xi , X2)=X1 , X2 A) Does this firm's tec...
Problem 4: A firm has the following production function: Xi , X2)=X1 , X2 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in x1. Is the marginal product of input 2 increasing, constant, or decreasing in x2? D) Suppose the firm...
Problem 3: A firm has the following production function: f(x1,x2) = x7/3x4/3 A) Does this firm's...
Problem 3: A firm has the following production function: f(x1,x2) = x7/3x4/3 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in X1. Is the marginal product of input 2 increasing, constant, or decreasing in xz? D) Suppose the firm wants to...
Problem 1: A firm has the following production function: min{x1, 2x2) f(x,x2)= A) Does this firm's technology exhibit c...
Problem 1: A firm has the following production function: min{x1, 2x2) f(x,x2)= A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the optimality condition that determines the firm's optimal level of inputs? C) Suppose the firm wants to produce exactly y units and that input 1 costs $w per unit and input 2 costs $w2 per unit. What are the firm's conditional input demand functions? D) Using the information from part D), write...
A firm has the following production function: ?(?1, ?2) = ???{?1, 2?2} A) Does this firm’s technology exhibit constant...
A firm has the following production function: ?(?1, ?2) = ???{?1, 2?2} A) Does this firm’s technology exhibit constant, increasing, or decreasing returns to scale? B) What is the optimality condition that determines the firm’s optimal level of inputs? C) Suppose the firm wants to produce exactly ? units and that input 1 costs $?1 per unit and input 2 costs $?2 per unit. What are the firm’s conditional input demand functions? D) Using the information from part D), write...
Question 4 (1 point) Suppose a firm has a production function given by Q = 2K...
Question 4 (1 point) Suppose a firm has a production function given by Q = 2K + L, where Lis labor, Kis capital and Q is the quantity of output. Which of the following statements is WRONG? The firm is exhibiting constant returns to scale The firm's marginal product of capital is constant The firm's marginal product of labor is constant The firm's marginal rate of technical substitution depends on the amount of inputs
The production function is f(K,L)=K(1/2)+L(1/2) for questions 4, 5, and bonus. 4. Does this production function...
The production function is f(K,L)=K(1/2)+L(1/2) for questions 4, 5, and bonus. 4. Does this production function exhibit decreasing, constant, or increasing returns to scale. 5. Find the rate of technical substitution. Bonus. Find the elasticity of substitution (σ) for this production function.
NEED ANSWERS OF PART (f,g,h,j) Problem 2 [21 marks] Consider a firm that uses two inputs. The quantity used of input 1...
NEED ANSWERS OF PART (f,g,h,j)
Problem 2 [21 marks] Consider a firm that uses two inputs. The quantity used of input 1 is denoted by x, and the quantity used of input 2 is denoted by x2. The firm produces and sells one good using the production function f(x1, x2)-4x053x25. The final good is sold at price P $10. The prices of inputs 1 and 2 are w$2 and w2 $3, respectively. The markets for the final good and both...
1. Consider a firm that has the following CES production function: Q = f(L,K) = [aLP...
1. Consider a firm that has the following CES production function: Q = f(L,K) = [aLP + bK°]!/p where p a. Derive the MRTS for this production function. Does this production function exhibit a diminishing MRTS? Justify using derivatives and in words. What does this imply about the shape of the corresponding isoquants? (10 points) b. What are the returns to scale for this production function? Show and explain. Explain what will happen to cost if the firm doubles its...
A firm has the production function y= f(x1,x2)= 0.25x11/2 x21/2 . Input prices are w1=$4 and w2=...
A firm has the production function y= f(x1,x2)= 0.25x11/2 x21/2 . Input prices are w1=$4 and w2= $16 a) Use the technical rate of substitution, the input price rate, and the production function to compute the conditionial input demand fucntion x1(y) and x2(y). b) Compute the firm's long run cost function c(y).
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm e...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
Problem 4: A firm has the following production function: Xi , X2)=X1 , X2 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in x1. Is the marginal product of input 2 increasing, constant, or decreasing in x2? D) Suppose the firm...
Problem 3: A firm has the following production function: f(x1,x2) = x7/3x4/3 A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the firm's Technical Rate of Substitution? What is the optimality condition that determines the firm's optimal level of inputs? C) Is the marginal product of input 1 increasing, constant, or decreasing in X1. Is the marginal product of input 2 increasing, constant, or decreasing in xz? D) Suppose the firm wants to...
Problem 1: A firm has the following production function: min{x1, 2x2) f(x,x2)= A) Does this firm's technology exhibit constant, increasing, or decreasing returns to scale? B) What is the optimality condition that determines the firm's optimal level of inputs? C) Suppose the firm wants to produce exactly y units and that input 1 costs $w per unit and input 2 costs $w2 per unit. What are the firm's conditional input demand functions? D) Using the information from part D), write...
Question 4 (1 point) Suppose a firm has a production function given by Q = 2K + L, where Lis labor, Kis capital and Q is the quantity of output. Which of the following statements is WRONG? The firm is exhibiting constant returns to scale The firm's marginal product of capital is constant The firm's marginal product of labor is constant The firm's marginal rate of technical substitution depends on the amount of inputs
NEED ANSWERS OF PART (f,g,h,j)
Problem 2 [21 marks] Consider a firm that uses two inputs. The quantity used of input 1 is denoted by x, and the quantity used of input 2 is denoted by x2. The firm produces and sells one good using the production function f(x1, x2)-4x053x25. The final good is sold at price P $10. The prices of inputs 1 and 2 are w$2 and w2 $3, respectively. The markets for the final good and both...
1. Consider a firm that has the following CES production function: Q = f(L,K) = [aLP + bK°]!/p where p a. Derive the MRTS for this production function. Does this production function exhibit a diminishing MRTS? Justify using derivatives and in words. What does this imply about the shape of the corresponding isoquants? (10 points) b. What are the returns to scale for this production function? Show and explain. Explain what will happen to cost if the firm doubles its...
9. Suppose the firm's production function is given by f(K,L) = min (Kº,L"} (a) For what values of a will the firm exhibit decreasing returns to scale? Constant returns to scale? Increasing returns to scale? (b) Derive the long-run cost function and the optimal input choices. (c) Suppose the capital is fixed at K = 10,000 and a = 1. Assuming that the firm wants to produce less than 100 units, derive 10. Consider the production function: f(K,L)=KLI. Let w...
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