Question

Assume one input, one output production function which we know very little about. But over a...

Assume one input, one output production function which we know very little about. But over a period of three years we see that (1) with p = 1,w = 1 the firm choose x = 2,y = 5 (2) with p = 3,w = 0.5, the firm will choose x = 4 and y = 6 and (3) withp=4,w=2,thefirmwillchoosex=3,y=11. Graph the isoprofit lines associated with each pair of prices and quantity choices. Show on your graph what we have learned about the firm’s technology. Note we do not know the functional form of the production function.

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
Question 1: A firm produces one good with a technology given by the production function y...
Question 1: A firm produces one good with a technology given by the production function y = f (x) = x1/3. The factor price w and the price p for the good are fixed. a) Explore whether the production function exhibits increasing returns to scale. b) Determine the cost function c) Determine the demand function for the input factor. d) How much will the firm produce?
production function Consider a firm that produces a single output good Y with two input goods:...
production function Consider a firm that produces a single output good Y with two input goods: labor (L) and capital (K). The firm has a technology described by the production function f : R 2 + → R+ defined by f(l, k) = √ l + √ k, where l is the quantity of labor and k is the quantity of capital. (a) In an appropriate diagram, illustrate the map of isoquants for the firm’s production function. (b) Does the...
Consider a firm that produces a single output with a single input, labor, using production function...
Consider a firm that produces a single output with a single input, labor, using production function F(L)=100L−4(L^2), for L∈[0,12.5]. The input price is W=2. 1. Determine the firm’s cost function C(Q), that is, the lowest cost of producing Q units of output. State the associated labor choice for a given required output, L(Q). Consider only the range Q ∈ [0, 12.5] . 2. What is the firm’s marginal cost curve, MC(Q)?
A competitive firm has a production function described as follows. “Weekly output is the square root...
A competitive firm has a production function described as follows. “Weekly output is the square root of the minimum of the number of units of capital and the number of units of labor employed per week.” Suppose that in the short run this firm must use 16 units of capital but can vary its amount of labor freely. a. Write down a formula that describes the marginal product of labor in the short run as a function of the amount...
2. Suppose a firm is producing 200 widgets. The firm’s production function is Cobb- Douglas with...
2. Suppose a firm is producing 200 widgets. The firm’s production function is Cobb- Douglas with decreasing returns to scale. (This means we have normal, convex isoquants). The firm uses K’ units of capital and L’ units of labor. Initially, the input prices are w’ and r’. However, an exogenous shock in the labor market causes an increase in the wage rate, resulting in an increase in input prices from w’ to w’’ where w’<w’’. Using a graph (of isoquant...
Consider a firm whose production technology can be represented by a production function of the form...
Consider a firm whose production technology can be represented by a production function of the form q = f(x1, x2) = x α 1 x 1−α 2 . Suppose that this firm is a price taker in both input markets, with the price of input one being w1 per unit and the price of input two being w2 per unit. 1. Does this production technology display increasing returns to scale, constant returns to scale, decreasing returns to scale, or variable...
Problem 3. Consider the Leontiev (perfect complements) production function f(x, y) = M in x 9.6...
Problem 3. Consider the Leontiev (perfect complements) production function f(x, y) = M in x 9.6 , y 5.2 . (A) How many units of good y would be a perfect complement for 1 unit of good x? What is the equation of the firm’s kink line? (B) Assume the firm has a production quota of q = 400 units. Graph the firm’s level-400 isoquant. What are the coordinates of the kink? (C) Suppose the input prices are (px, py)...
graph the function over a one-period interval. Graph the basic function with a dotted line, then...
graph the function over a one-period interval. Graph the basic function with a dotted line, then show each transformmation with a dotted line graph. The final graph should be a solid line, after all transformations are completed. 1) y= 2+ sin(2x-pie) 2) y= 1/2 cos 4 (x-pie/3)
Consider the Leontiev (perfect complements) production function f(x, y) = M in x 9.6 , y...
Consider the Leontiev (perfect complements) production function f(x, y) = M in x 9.6 , y 5.2 . (A) How many units of good y would be a perfect complement for 1 unit of good x? What is the equation of the firm’s kink line? (B) Assume the firm has a production quota of q = 400 units. Graph the firm’s level-400 isoquant. What are the coordinates of the kink? (C) Suppose the input prices are (px, py) = (16,...
The production function is given by y=L1/2, where y is the output, and L is the...
The production function is given by y=L1/2, where y is the output, and L is the amount of labor input. Assume the wage rate is w so that the cost of using L unit of labor input is wL. Let p denote the unit price of the output. Note that w and p are exogenously given. (1) Find the function for the profit (in terms of p, w and L). (2) Find the optimal choice of labor input and the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT