Question

Suppose that Hannah and Sam have the production function

Q=F(L,K)Q=F(L,K)

Q=10L0.5K0.5.Q=10L0.5K0.5.

The wage rate is $1,000 per week and a unit of capital costs $4,000
per week.

a. True or false? If we plot *L* along the horizontal axis
and *K* along the vertical axis, then Hannah and Sam's
output expansion path is a straight line that passes through the
origin and has a slope of 0.25.

TrueFalse

b. What is their cost function? Choose from the options
below.

A:400QB:200Q2C:2,000Q0.5D:200Q+400Q2A: 400QB: 200Q2C: 2,000Q0.5D: 200Q+400Q2

(Click to select)Formula DFormula
BFormula AFormula C

Answer #1

Suppose that Hannah and Sam have the production function
Q=F(L,K) Q=10L0.5K0.5. The wage rate is $1,000 per week and a unit
of capital costs $4,000 per week.
a. True or false? If we plot L along the horizontal axis and K
along the vertical axis, then Hannah and Sam's output expansion
path is a straight line that passes through the origin and has a
slope of 0.25.
b. What is their cost function? Choose from the options
below.
A:400Q
B:200Q^2...

Suppose that the production function for Hannah and Sam’s home
remodeling business is
Q=F(L,K)Q=F(L,K)
Q=10L0.2K0.3.Q=10L0.2K0.3.
The wage rate is $1,500 per week and the cost of renting a unit of
capital is $1,000 per week. What is their cost function?
Instructions: Enter your answer as a whole
number.
C(Q) = Q2.

Suppose that the production function for Hannah and Sam's home
remodeling business is
Q
= F(L,K)
Q
= 10L0.4K0.1.
Assume the wage rate is $8,000 per week and the cost of renting a
unit of capital is $2,000 per week.
a. What is the least-cost input combination for remodeling 400
square feet each week?
units of labor and units
of capital.
b. What is the total cost?
Instructions: Round your
answer to 2 decimal places.

Suppose that the production function for Hannah and Sam's home
remodeling business is
Q
= F(L,K)
Q
= 10L0.2K0.3.
Assume the wage rate is $8,000 per week and the cost of renting a
unit of capital is $2,000 per week.
a. What is the least-cost input combination for remodeling 500
square feet each week?
Instructions: Round your
answers to 2 decimal places.
units of labor and units
of capital.
b. What is the total cost?
Instructions: Round your
answer to...

Suppose that the production function for Hannah and Sam’s home
remodeling business is Q=F(L,K) Q=10L^0.2K^0.3. The wage rate is
$1,500 per week and the cost of renting a unit of capital is $1,000
per week.
What is their cost function? Instructions:
Enter your answer as a whole number. C(Q) = Q2.

What is the expansion path for the firm with the production
function of f(L, K) = (L+1)K

firm can manufacture a product according to the production
function
Q = F (K, L) = K0.75 L 0.25 a. What is this type of function
called? Are the inputs perfect substitutes or should they be used
in a fixed proportion instead? © (3pts) b. Suppose capital is fixed
at 81 units. If the firm can sell its output at a price of $200 per
unit and wage is $50, how many units of labor should the firm hire
in...

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...

Consider that the production function Q= F(K,L) = 3K + 9L
Determine the mix of output that minimizes costs when the wage
is $20 and the price of capital is $30.

Suppose that q=40, L=5 and K=25 is a point on the production
function
q=f(L,K).
Is it posssible for q=40, L=55, and K=26 to also be a point on
this production function? Why or why not?
The combination q= 40, Lequals=5, and Kequals=26
A.can be a point because we assume production functions hold
technology constant.
B.cannot be a point because we assume production functions
represent the short run.
C.cannot be a point because we assume production functions are
comprised of fixed...

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