a) Calculate the technical rate of subsitutionb) Derive the cost function c(w1,w2,y)c) When w1 = 5 and w2 = 8, calculate the average cost AC(y) and the marginal cost MC(y). For y > 0, which one is larger, AC(y) or MC(y)?d) When w1 = 8 and w2 = 9, derive the supply function y(p)e) Suppose that Pot & Gold Inc has to pay a quasi fixed cost of $50. When w1 = 8 and w2 = 9, derive the supply function y(p) for Pot & Gold Inc 4. Pot & Gold Inc. makes and sells Christmas ornaments in a perfectly competitive market.Its production function is given by f(x, z)=√√x+3z, where x denotes the amount of plasticand z denotes the amount of wood. The price of plastic is w₁ and the price of wood is w₂. Lety denote the amount of Christmas ornaments produced and p denote the price of Christmasornaments (p>0).

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4. Pot & Gold Inc. makes and sells Christmas ornaments in a perfectly competitive market. Its production function is given by f(x,z) = √√x + z, where x denotes the amount of plastic and z denotes the amount of wood. The price of plastic is w₁ and the price of wood is w2. Let y denote the amount of Christmas ornaments produced and p denote the price of Christmas ornaments (p > 0).

4. Pot & Gold Inc. makes and sells Christmas ornaments in a perfectly competitive market. Its production function is given by f(x,z) = √√x + z, where x denotes the amount of plastic and z denotes the amount of wood. The price of plastic is w₁ and the price of wood is w2. Let y denote the amount of Christmas ornaments produced and p denote the price of Christmas ornaments (p > 0).

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter25: The Supply Of And Demand For Productive Resources

Section: Chapter Questions

Problem 8CQ

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