6. Duane breeds parrots for a living. He has discovered that the production function for parrot chicks (Q) is: Q = K2 L12 where K is capital (for example nest boxes, cages and the like) and L is parrot food. The price of K is $8 and the price of L is $2.
Q: Now consider Marie’s problem in the long run, where her stock of cattle may vary. Set up her long…
A: Costs are the expenses that firms incur during the production processes. The firm’s costs depend…
Q: 1. Pekan Nenas has 20 competitive pineapple orchards, all of which sell pineapples at the world…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: Suppose the production budget is $200/hour, the wage is $5/hour, and the cost of capital is…
A: Isocost is a downward sloping curve which shows different combinations of labor and capital that can…
Q: 7. On short notice, Walter creates blue ice according to the following production function:…
A: * ANSWER :- (7)
Q: The optimal level of production for any company is the level of production that either maximizes…
A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…
Q: Supposing that a single consumer works for a firm, the quantity of labor input for the firm, N, is…
A:
Q: 1. Juan Valdez owns a coffee farm in Colombia. His production function is: f(x1, x2) = (x1 – 1)0.25…
A:
Q: Assume that capital and labor are substitutes in production. The output effect of an increase in the…
A: Output effect is the effect of a rise in output on the use of any particular input, holding input…
Q: An economy can produce leather using labor and capital and wheat using labor and land. The total…
A:
Q: Assume that there are 2 input combinations in the isoquant: point A (at K=20, L-10), and point B (at…
A: Isoquant curves are defiend as the locus of all the points with equal level of production.Some…
Q: True or False ? Why ? In the long run, Betty’s factory produces 10,000 widgets with cost-minimizing…
A: Production Equilibrium is where Slope of isoquant is equal to the slope of iso cost curve . Or…
Q: Florida citrus growers say that the recent crackdown on illegal immigration is increasing the market…
A: Demand for human labor will decrease because of the high degree of substitution which means that…
Q: The production function for good X in the table below exhibits increasing marginal returns to…
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: b) Firm ABC has the following production function Q = 6K³ + 4KL - L3 i. Determine the average…
A:
Q: 6. 3.4 from Microeconomic Analysis Given the production function f(r1, 22) = r, calculate the…
A: Production function : f(x1 , x2 ) = x1a1x2a2 Let the output price be (p) , cost of (x1) be (w) and…
Q: Determine the output level creates allocative efficiency.
A: The output level determination depends on the forms of market and the shape of curves in the market.…
Q: 1. Juan Valdez owns a coffee farm in Colombia. His production function is: f(x1, x2) = (x1 – 1)0.25…
A: Answer - Thank you for submitting the questions but we are authorized to solve one question at a…
Q: Consider the table below that describes the production function for a good (Q) in terms of inputs…
A: Marginal product is the additional output produced by employing an additional unit of input.
Q: What is the best example of a marginal change? After graduating from university, Neville's income…
A: The marginal change would result in the change of one variable when another variable changes by a…
Q: Assume that Alex uses capital and labour to produce a good. The unit price of capital is $2 and the…
A: Here we calculate the amount of additional labor if Alex want to incur the same cost by using the…
Q: The marginal substitute rate of labor to capital is 0.4 and the marginal production of capital is 5,…
A: The MRTS {"marginal rate of technical substitution"} of labor to capital is described as the rate at…
Q: 2.1. The law of demand states that the higher the price of a good, the higher the quantity demanded…
A: 2.1) The law of demand states that the higher the price of a price changes the quantity demanded…
Q: Consider a general Cobb-Douglas production function q= LK, and assume the firm produces q-qo. Which…
A: Ans. Correct answer is option - (c) if we arrange the options a, b, c , d, e from above. We can say…
Q: An economy can produce leather using labor and capital and wheat using labor and land. The total…
A: In the business examination, the production possibility frontier (PPF) is a bend showing the…
Q: 11. A firm in a perfectly competitive market uses capital and labor to produce output q. The firm's…
A: As given F(L,K)=L0.5K0.5 Price of labor=w=4 and price of capital=r=1 In order to minimize the costs,…
Q: The production function y= K0.5 L0.5 shows that the inputs are perfect substitutes. True or false.
A: Two inputs are substitutes when only one of them is enough to produce the good.
Q: What is a product possibility curve?
A: Meaning of Microeconomics: The term macroeconomics refers to that situation under which the…
Q: production function of this nature; AX1aX2b determine the Marginal Rate of Technical Substitution.
A: Marginal rate of technical substitution means the rate at which one factor is substitute by other…
Q: Use the graph to answer the questions below. X2 В (3, 4) A (1, 5) Y2 Y1 C(7, 2) 4. Which point has…
A: The curves on the graph are isoquants which different combinations of inputs needed to produce a…
Q: 10: Consider a car manufacturer which uses capital K and labor L to produce q cars according to the…
A: Given, r = 3 w=1 q=f(L, K)=L18K38
Q: Answer the question on the basis of the following output data for a firm. Assume that the amounts of…
A: Marginal product: A marginal product is defined as the change in output as a result of utilizing an…
Q: For each of the following cases, determine whether the firm should (A) Use more labor and less…
A: We will answer the first three questions only. Please resubmit the question mentioning any other…
Q: Mandy owns a small coffee shop. Her production function is q=2K0.5L where q is the number of cups of…
A: Profit maximisation and loss minimisation are the ultimate goals of firms
Q: Consider the following production function q = F (L, K) = L²K What is the marginal rate of…
A: Marginal rate of technical substitution (MRTS): - it is the rate that shows the number of one input…
Q: Suppose that Marie produces milk q using her own labor l and cattle k using the production function…
A:
Q: The marginal rate of technical substitution is The rate at which a producer is able to exchange,…
A: The marginal rate of technical substitution is the rate at which a producer is able to exchange,…
Q: A firm pays each worker (1.e, each unit of labour L) a wage w 4 and pays for each computer (i.e.…
A: Ans. Option (a) Firm employs 6 workers and buys no computers. We are given, w = 4 r = 3 Production…
Q: The production function is Q = K^.6 L^.4. The marginal rate of technical substitution is
A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…
Q: 29) The way that a firm combines inputs and factors of production in order to determine how much…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: You own a coffee shop and use both labor and capital to make lattes. Currently, the marginal product…
A: Input combination is efficient when Marginal product of labor / Price of labor = Marginal product of…
Q: Suppose that aKC = 5, capital used to produce one yard of cloth. aLC = 8, labor used to produce one…
A: As you remember that there are 3 Central Problem . 1. what to produce 2. How to produce :- it is…
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- 3. Duane breeds parrots for a living. He has discovered that the production function for parrot chicks (Q) is: Q=K0.5 p0.5 where K is capital (for example nest boxes, cages and the like) and F is parrot food. The price of K is $8 and the price of F is $2. (b) Does this production function exhibit constant, increasing or decreasing returns to scale? Provide a graph of the function using Excel.3. Duane breeds parrots for a living. He has discovered that the production function for parrot chicks (Q) is: Q=K0.5 p0.5 where K is capital (for example nest boxes, cages and the like) and F is parrot food. The price of K is $8 and the price of F is $2. (a) What type of production function is this? Explain. (b) Does this production function exhibit constant, increasing or decreasing returns to scale? Provide a graph of the function using Excel. (c) Find the marginal products of capital and food. (d) Suppose that Duane wants 144 parrot chicks, how much K and F should be employed to minimise costs. What is the cost of producing 144 parrot chicks? 1 1 (e) Suppose that Duane is faced with the same problem as in (e) except that he has a fixed amount of K. In fact, K = 16. How much F should be bought to minimise costs? What is the total cost?.2. Tiva has a crafts store that makes jewelry using beads (B) and copper (C). Her productionfunction for jewelry is given byQ = B0.4C0.4Suppose she can buy beads and copper at prices PB and PC, respectively.(a) Calculate Tiva’s marginal rate of technical substitution between B and C.(b) Does this production function have increasing, constant, or decreasing returns to scale?Explain. (c) Set up the cost minimization problem you would use to calculate Tiva’s cost functionC(Q) in Lagrangian form. (Note: You do not need to solve it or derive first orderconditions.Suppose Tiva decides to branch out in her jewelry offerings by getting a 3D printer. The costof producing new 3D printed jewelry isC(Q) = 25 + Q24For the rest of this problem, assume Tiva can produce fractions of jewelry, don’t worry aboutrestricting your answers to whole numbers.(d) Compute Tiva’s marginal cost and average cost of production for 3d printed jewelry.(e) Explain why she will shut down when the market price falls…
- 6. The Miller Company is trying to determine the combination of inputs to produce a specific volume of bar stools ordered. The production function for the firm is given: Q = 14LK? The wage of a worker is $80/day and the price of a machine is $240/day. If they need to produce 4,536 bar stools per day: a. What is the optimal combination of Labor and Capital, i.e. find the cost-minimizing combination of inputs to produce 4,536 bar stools? b. What is the total cost of using the inputs found in part a?1. Let y = f(x1, x2)=x11/2+ X1X2 be a firm's production function, where x20, x220. - a. Write down the firm's production possibility set, and its input requirement set.“ b. Is this production function concave, quasi-concave? c. Is this production function homogenous, homothetic? + d. Find its returns to scale when x1=1, and x2=1.e3. Frisbees are produced according to the production function q = 2K+L where q = output of frisbees per hour, K =capital input per hour, L =labor input per hour. a) If K = 10, how much L is needed to produce 100 frisbees per hour? b) If K = 25, how much L is needed to produce 100 frisbees per hour? c) Graph the q = 100 isoquant. Indicate the points on that isoquant defined in part a and part b. What is the RTS along this isoquant? Explain why the RTS is the same at every point on the isoquant. d) Graph the q = 50 and q = 200 isoquants for this production function also. Describe the shape of the entire isoquant map. e) Suppose technical progress resulted in the production function for frisbees becoming q = 3K+ 1.5L. Answer part a through part d for this new production function and discuss how it compares to the previous case.
- 4. A firm producing cars. The production function for shoes (Q) is: Q = K2 L"2 where K is capital and L is labor. The price of K is $8 and the price of L is $2. a. What type of production function is this? b. Does this production function exhibit constant, increasing or decreasing returns to scale? Explain. c. What is the average product of capital, average product of labor, marginal product of capital, and marginal product of labor? d. Does capital obey the "law of diminishing returns?" Explain. e. Suppose that firm wants to produce 144 cars, how much K and L should be employed to minimize costs? f. What is the minimum cost of producing 144 cars? g. Now suppose that firm is faced with the same problem as in (e and f) except that firm has a fixed amount of K. In fact, K = 16. How much L should be employed to minimize costs, and what is the total cost.4. Show that the law of diminishing marginal productivity holds for the production function Q=6L² - 0.2L'24. A specific production process can be represented by the production function, f(x1, x2) = (x 1/2 + x 1/3) 3. A. How much x₁ could the firm give up if it wanted to use 1 extra unit of x2 and still wanted to produce an identical level of output? B. Labeling everything and being precise, draw the isoquant corresponding to q = 4. = 9. C. On the same graph, draw the isoquant corresponding to q D. Between the isoquants you just drew, does the production technology display decreasing, increasing, or constant returns to scale? E. Analytically determine whether the production process has global returns to scale that match your local results from part D. Recall that in order to claim global returns to scale, your result must hold for ALL possible values of x1 and x2.
- 5. Suppose that a hot dog vendor uses a cart (K) and his time (L) to make and sell hot dogs. The vendor's production function is where Q is the number of hot dogs per day. Suppose that the rental on hot dog carts is $50 per day and that the vendor wants to Q = K0.3 10.7 produce 500 hot dogs per day. Use calculus to: a. derive the demand for labor. b. show that the demand for labor satisfies the law of demand. 2IV. Will can produce a higher grade, Gw, on an upcoming economic exam by studying. His production function depends on the number of hours he studies marginal analysis problems, A, and the number of hours he studies supply and demand problems, R. Specifically, Gw = 2.5A0.36R 0.64. His roommate David's grade production function is G) = 2.5A0.25R0.75 a. What is Will's marginal productivity from studying supply and demand problems? What is David's? b. What is Will's marginal rate of technical substitution between studying the two types of problems? What is David's?2. The Acme Anvil Company's output is given by the Cobb-Douglas Production function P = 60L2/3K1/3, where P is the number of anvils produced when L is the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 150 and K = 150? b. Find the marginal productivities. c. Evaluate the marginal productivities with L = 150 and K = 150. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $300 then there is a constraint L+ K = 300. Use Lagrange multipliers (2) to find the values of L and K that will maximize production and find the maximum production f. Find 2. 12| is called the marginal productivity of money and will give the number additional units produced for each dollar increase in the budget. Interpret 2 for this problem. Only need paVAS e and fl