Draw isoquant curve for the following production functions.
Here ?Kdenotes quantity of capital input and ?Ldenotes...
Draw isoquant curve for the following production functions.
Here ?Kdenotes quantity of capital input and ?Ldenotes the
quantity of labor input.
In the graph, let ?Kbe on the vertical axis and ?Lbe on the
horizontal axis.
(a) ?(?,?)=?⋅?=?¯,F(K,L)=K⋅L=Q¯,where
(1) ?¯=100,Q¯=100,
(2) ?¯=200,Q¯=200,
(3) ?¯=300.Q¯=300.
This production function is an example of Cobb-Douglas
production technology.
(b) ?(?,?)=2?+5?=?¯,F(K,L)=2K+5L=Q¯,where
(1) ?¯=100,Q¯=100,
(2) ?¯=200,Q¯=200,
(3) ?¯=300.Q¯=300.
This production function is an example of perfect substitutes
production technology.
(c) ?(?,?)=min{2?,5?}=?¯,F(K,L)=min{2K,5L}=Q¯,where
(1) ?¯=100,Q¯=100,
(2) ?¯=200,Q¯=200,
(3)...
Draw isoquant curve for the following production functions.
Here ?Kdenotes quantity of capital input and ?Ldenotes...
Draw isoquant curve for the following production functions.
Here ?Kdenotes quantity of capital input and ?Ldenotes the
quantity of labor input.
In the graph, let ?Kbe on the vertical axis and ?Lbe on the
horizontal axis.
(a) ?(?,?)=?⋅?=?¯,F(K,L)=K⋅L=Q¯,where
(1) ?¯=100,Q¯=100,
(2) ?¯=200,Q¯=200,
(3) ?¯=300.Q¯=300.
This production function is an example of Cobb-Douglas
production technology.
(b) ?(?,?)=2?+5?=?¯,F(K,L)=2K+5L=Q¯,where
(1) ?¯=100,Q¯=100,
(2) ?¯=200,Q¯=200,
(3) ?¯=300.Q¯=300.
This production function is an example of perfect substitutes
production technology.
(c) ?(?,?)=min{2?,5?}=?¯,F(K,L)=min{2K,5L}=Q¯,where
(1) ?¯=100,Q¯=100,
(2) ?¯=200,Q¯=200,
(3)...
Consider the short-run money market model and the short-run
exchange rate model together: a. Draw the...
Consider the short-run money market model and the short-run
exchange rate model together: a. Draw the combined models in a
single graph, showing the initial domestic interest rate (r1) and
the initial exchange rate (e1) b. Show how the short-run model
would change with a decrease in domestic money supply, specifically
noting the impact on domestic interest rates, exchange rates, and
the price level c. Following on from part (b), explain why the
exchange rate changes d. In the long-run,...
Consider the model of housing markets with vacancies. Let R be
the rental price (per square...
Consider the model of housing markets with vacancies. Let R be
the rental price (per square foot), K the short-run capacity of the
rental market, Q the quantity of rented space and V the amount of
vacant space. (a) Let the capacity be 100, the demand for rented
space QD = 110 -R and the demand for vacant space be V D = 90 - 4R.
What is the housing market equilibrium, i.e. what are the price,
the amount of...
Solow Growth Model Question: Consider an economy where output
(Y) is produced according to function Y=F(K,L)....
Solow Growth Model Question: Consider an economy where output
(Y) is produced according to function Y=F(K,L). L is number of
workers and Y is the capital stock. Production function F(K,L) has
constant returns to scale and diminishing marginal returns to
capital and labor individually. Economy works under assumption that
technology is constant over time. The economy is in the
steady-state capital per worker. Draw graph. Next scenario is that
the rate of depreciation of capital increases due to climate change...
Optimal Capital Structure with Hamada
Beckman Engineering and Associates (BEA) is considering a change
in its...
Optimal Capital Structure with Hamada
Beckman Engineering and Associates (BEA) is considering a change
in its capital structure. BEA currently has $20 million in debt
carrying a rate of 8%, and its stock price is $40 per share with 2
million shares outstanding. BEA is a zero growth firm and pays out
all of its earnings as dividends. The firm's EBIT is $12.438
million, and it faces a 40% federal-plus-state tax rate. The market
risk premium is 5%, and the...
Optimal Capital Structure with Hamada
Beckman Engineering and Associates (BEA) is considering a change
in its...
Optimal Capital Structure with Hamada
Beckman Engineering and Associates (BEA) is considering a change
in its capital structure. BEA currently has $20 million in debt
carrying a rate of 6%, and its stock price is $40 per share with 2
million shares outstanding. BEA is a zero-growth firm and pays out
all of its earnings as dividends. The firm's EBIT is $16 million,
and it faces a 25% federal-plus-state tax rate. The market risk
premium is 4%, and the risk-free...
Optimal Capital Structure with Hamada
Beckman Engineering and Associates (BEA) is considering a change
in its...
Optimal Capital Structure with Hamada
Beckman Engineering and Associates (BEA) is considering a change
in its capital structure. BEA currently has $20 million in debt
carrying a rate of 6%, and its stock price is $40 per share with 2
million shares outstanding. BEA is a zero growth firm and pays out
all of its earnings as dividends. The firm's EBIT is $13.257
million, and it faces a 30% federal-plus-state tax rate. The market
risk premium is 6%, and the...
Optimal Capital
Structure with Hamada
Beckman Engineering
and Associates (BEA) is considering a change in its...
Optimal Capital
Structure with Hamada
Beckman Engineering
and Associates (BEA) is considering a change in its capital
structure. BEA currently has $20 million in debt carrying a rate of
6%, and its stock price is $40 per share with 2 million shares
outstanding. BEA is a zero growth firm and pays out all of its
earnings as dividends. The firm's EBIT is $13.257 million, and it
faces a 30% federal-plus-state tax rate. The market risk premium is
6%, and the...