A firm pays each worker (1.e, each unit of labour L) a wage w 4 and pays for each computer (i.e. each unit of capital K) a cost of r= 3. The firm has a production function Y K+2L and needs to produce Y= 12. Which of the following is correct? Select one answer: O The firm employs 6 workers and buys no computers. O The firm buys 6 computers and hires no workers. O The firm employs 12 workers and buys no computers. m buys 12 computers and hires no workers.
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- A small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. B. is not maximizing profit because the marginal revenue product of labor is less than the wage. C. is maximizing profit because the marginal product of labor is greater than the wage. D. is not maximizing profit because the price of the output is not equal to the wage. E. is not maximizing profit because the marginal product of labor is greater than the wage.Suppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. Given this market structure, how many assembly workers will Zamboni Enterprises choose to hire? How many zambonis will Zamboni Enterprises produce and sell?Suppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. Given this market structure, how many assembly workers will Zamboni Enterprises choose to hire? How many zambonis will Zamboni Enterprises produce and sell? What will be the price of a zamboni? If the market for zambonis were competitive, how many zambonis would be produced? If the market for…
- Suppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. If the market for zambonis were competitive, how many zambonis would be produced? If the market for zambonis were competitive, how many assembly workers would be hired? If the market for zambonis were competitive, at what price would zambonis be sold?Suppose that the production of crayons ( qq ) is conducted at two locations and uses only labor as an input. The production function in location 1 is given by q1=10l0.51q1=10l10.5 and in location2 by q2=50l0.52q2=50l20.5a. If a single firm produces crayons in both locations, then it will obviously want to get as large an output as possible given the labor input it uses. How should it allocate labor between the locations to do so? Explain precisely the relationship between l1l1 and l2l2b. Assuming that the firm operates in the efficient manner described in part (a), how does total output ( qq ) depend on the total amount of labor hired (l)?(l)?suppose that we are in there long-run and a firm is choosing K and L to cost minimize. Suppose that as in tutorial: Q = (LK)^0.5. (or also written as Q = (LK)0.5) This implies a Marginal Rate of Technical Substitution (MRTS) that is given by: MRTS = -K/L As in lecture and tutorial and the above question, assume that labour is on the x-axis. Suppose also that the price of labour is equal to $6, the price of capital is equal to $23. The firm receives an order for 222 units of output, and wants to find a way to minimize its costs of producing this output. How much capital will the firm need to use if it wants to fulfill this order and is cost minimizing?
- Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. Number of Workers Units of Output 0 0 1 50 2 90 3 125 4 150 5 170 6 165 The marginal product of the sixth worker is Multiple Choice 165 units of output. 20 units of output. −5 units of output. −15 units of output.A firm is currently employing a cost-minimizing combination of labor and capital for a given level of output. The firm is employing 20 workers, and the marginal product of the last worker is 40 units of output. The firm is employing 100 units of capital, and the marginal product of the last unit of capital is 10 units of output. If the wage rate is $20 per hour, what is the price of capital? (A) $2.5 per hour (B) $5 per hour (C) $10 per hour (D) $100 per hour (E) $200 per hourHannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q=F(L,K) Q=10L^0.25 K^0.25 where L is their number of workers and K is units of capital. The wage rate is $500 per week and a unit of capital costs $500 per week. Suppose that when initially producing 10 square feet a week, they use 1 unit of capital.a. What is their short-run cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ b. What is their short-run average cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ c. What is their long-run cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ d. What is their long-run average cost of remodeling 80 square feet per week? Instructions: Round your answer…
- A firm that always employs two workers for each unit of capital follows which type of production function?O. Cobb-DouglasO. substituteO. LinearO. LeontietJoe owns a small coffee shop. His production function is q = 2K0.5 L where q is the number of cups of coffee produces, K is the number of coffee machines, and L is the number of employees. a) If K=1 and L=2, the marginal rate of technical substitution is _________. b) If, starting from 1 machine and 2 employees, Joe hires one more employee, then he can produce the same quantity of cups of coffee with _________ less machines.We often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain. For such production technologies, the marginal product of labor is increasing so long as the slope of the production frontier becomes steeper as we move toward more (we are increasing) the labor input.