Widget Factory INC. in Wisconsin has the follwing production function F(L,K)= 2L1/2K1/2 L represent the number of labour hours. workers at this factory are paid an hourly wage of 30$ and they rent capital at 25$ per hour. Since this is a competative market, the factory output gets per is output is $50 per unit. let's pretend the firm operate in the short run with capital fixed at 900, how many factory workers would widget factory inc. employ? what is their profit rate?

Widget Factory INC. in Wisconsin has the follwing production function F(L,K)= 2L1/2K1/2 L represent the number of labour hours. workers at this factory are paid an hourly wage of 30$ and they rent capital at 25$ per hour. Since this is a competative market, the factory output gets per is output is $50 per unit. let's pretend the firm operate in the short run with capital fixed at 900, how many factory workers would widget factory inc. employ? what is their profit rate?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 15P

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Widget factory Inc. in Wisconsin has the following production function: F(L,K) = 2L1/2 K1/2 L represent the number of labour hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at $25/hour. Since this is a competitive market, the factory output the factory gets per is output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many factory workers would Widget Factory Inc employ? What is their profit rate?
Roland Umbrellas has a production function given by Q = L0.5K0.5. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. In the long run, how many units of capital will Roland want to buy for each unit of labor?
Widget factory Inc. in Wisconsin has the following production function: F(L,K)=2L L represents the number of labours hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at$25/ hour.since this is a competitive market, the factory output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many workers would widget factory Inc employ? What is their profit rate?
A manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $12 per hour and capital is rented at $8 per hour. If the marginal product of labor is 60 units of output per hour and the marginal product of capital is 45 units of output per hour, is the firm using the cost-minimizing combination of labor and capital? If not, should the firm increase or decrease the amount of capital used in its production process?
Miguel and Jake run a paper company. Each week they need to produce 1,000 reams of paper to ship to their customers. The paper plant's long-run production function is: q= 4K^L+ where q is the number of reams produced, K is the quantity of capital rented, and L is the quantity of labor hired. K For this production, MP, =| L and MP, = 34 K K The weekly cost function for the paper plant is C=10K+2L where C is the total weekly cost How much capital and labor will Miguel and Jake need to rent and hire in order to produce 1,000 reams of paper each week, and how much will hiring these inputs cost them?
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Suppose the production function for high quality brandy is given by : Q = √KLWhere q is the output of brandy per week and L is labor hours per week ., in the short run K is fixed at 100, so the short run production function is Q = 10√La. If the capital rents for 10$ and the wage are 5$per hour ., write the short run total cost function. b. How much will the firm produce at a price of 20$ per bottles of brandy ?c. How many labor hours will be hired per week?
2.1 Consider N firms each with the constant-returns-to-scale production function Y = F (K, AL), or (using the intensive form) Y = ALf (k). Assume f'(•) > 0, f"(•) < 0. Assume that all firms can hire labor at wage wA and rent capital at cost r, and that all firms have the same value of A.(a) Consider the problem of a firm trying to produce Y units of output at minimum cost. Show that the cost-minimizing level of k is uniquely defined and is independent of Y, and that all firms therefore choose the same value of k.(b) Show that the total output of the N cost-minimizing firms equals the output that a single firm with the same production function has if it uses all the labor and capital used by the N firms. 2.2 The elasticity of substitution with constant-relative-risk-aversion utility. Consider an individual who lives for two periods and whose utility is given by equation (2.43). Let P1 and P2 denote the prices of consumption in the two periods, and let W denote the value of the…