Question

A firm’s production function is Q = min(K , 2L), where Q is the number of...

A firm’s production function is Q = min(K , 2L), where Q is the number of units of output produced using K units of capital and L units of labor. The factor prices are w = 4 (for labor) and r = 1 (for capital). On an optimal choice diagram with L on the horizontal axis and K on the vertical axis, draw the isoquant for Q = 12, indicate the optimal choices of K and L on that isoquant, and calculate the total cost.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
3. A firm’s production function is Q=min(K, 3L ). Input prices a re as follows: w=$...
3. A firm’s production function is Q=min(K, 3L ). Input prices a re as follows: w=$ 2 and r=$1. On the optimal choice diagram below, draw the isoquant for Q=12. Calculate the optimal choice of K and L for this level of output as well as the total cost. Then, draw in (with a dotted line) the isocost line consistent with your Total Cost value. It won't let me copy the graph template but it is a simple graph with...
Suppose a firm’s production function is given by Q = L 1/2 , K 1/2. a)...
Suppose a firm’s production function is given by Q = L 1/2 , K 1/2. a)   Suppose the firm has a fixed cost FC=6, the price of labor is w = 64 and the price of capital is r = 4. Derive the firm’s total cost function, TC(Q). b)   What is the firm’s marginal cost? c)   Graph the firm’s isoquant for Q = 20 units of output. On the same graph, sketch the firm’s isocost line associated with the total...
. 1 a) Calculate the corresponding cost function, c(w,r,q). ·q=(min(L,3K)).5 ·q=L-1/K b) Draw a representative isoquant...
. 1 a) Calculate the corresponding cost function, c(w,r,q). ·q=(min(L,3K)).5 ·q=L-1/K b) Draw a representative isoquant for q=12 ·Q=min(2L,(2(L+K))/3,2K)
Suppose a firm has a production function q = f(L, K) =2L + 4K, and the...
Suppose a firm has a production function q = f(L, K) =2L + 4K, and the factor prices are w = $2 and r = $2. What is the minimum cost at which the firm is able to produce 20 units of output? a. $10 b. $30 c. $45 d. $100 e. $50 please explain why
Suppose the production function is given by formula Q = KL. A) Draw the isoquant curve...
Suppose the production function is given by formula Q = KL. A) Draw the isoquant curve for Q = 128. (Draw K on the vertical axis and L on the horizontal axis.) B) Suppose K = 4. How many units of labor should the firm use if it wants to produce 128 units of output? Label it point X on the isoquant curve. C) Suppose K = 8.How many units of labor should the firm use if it wants to...
The firms production function is: Q=2L^2/3 K^1/3 A) Suppose the firm wants to determine the cost...
The firms production function is: Q=2L^2/3 K^1/3 A) Suppose the firm wants to determine the cost minimizing combination for L and K for any given values of q, w, and r. Solve for the the firms factor demand functions for L and K (i.e. express the optimal quantity of L and K in terms of W, r and Q) B) Using these factor demand functions, solve for the firm's long run cost function.
1. A firm production function is given by q(l,k) = l0.5·k0.5, where q is number of...
1. A firm production function is given by q(l,k) = l0.5·k0.5, where q is number of units of output produced, l the number of units of labor input used and k the number of units of capital input used. This firm profit function is π = p·q(l,k) – w·l – v·k, where p is the price of output, w the wage rate of labor and v the rental rate of capital. In the short-run, k = 100. This firm hires...
A firm’s production function is Q(L,K) = K^1/2 + L. The firm faces a price of...
A firm’s production function is Q(L,K) = K^1/2 + L. The firm faces a price of labor, w, and a price of capital services, r. a. Derive the long-run input demand functions for L and K, assuming an interior solution. If the firm must produce 100 units of output, what must be true of the relative price of labor in terms of capital (i.e. w/r) in order for the firm to use a positive amount of labor? Graphically depict this...
Frankie produces computer software. His firm's production function is Q = 1K + 2L, where Q...
Frankie produces computer software. His firm's production function is Q = 1K + 2L, where Q is the programs, K is capital employed, and L is the labor used. If Frankie faces factor prices of Pk=5 and Pl =5, the cheapest way to produce Q = 90 is: Part 1: By using how many units of capital? ____________ Part 2: By using how many units of labor? ____________ If Frankie faces factor prices of Pk=7 and Pl=21, the cheapest way...
A firm’s production function is Q! = min(4L ,5K ). The price of labor is w...
A firm’s production function is Q! = min(4L ,5K ). The price of labor is w and the price of capital is r. a) Derive the demand function of labor and capital respectively. How does the demand of capital change with the price of capital? b) Derive the long-run total cost function. Write down the equation of the long-run expansion path. c) Suppose capital is fixed at K = 8 in the short run. Derive the short-run total cost function....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT