Brian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{1/3L, 2K}. The inputs are perfect complement. If he uses 0.5 kg of wool and 3 hours of labour, he can produce 1 t-shirt. The pice of wage per hour is given by w=$10 and the price of each kg of wool is given by r=$4. What is the long run total cost function, C(q)? Sketch it on the diagram.

Brian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{1/3L, 2K}. The inputs are perfect complement. If he uses 0.5 kg of wool and 3 hours of labour, he can produce 1 t-shirt. The pice of wage per hour is given by w=$10 and the price of each kg of wool is given by r=$4. What is the long run total cost function, C(q)? Sketch it on the diagram.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.5P

See similar textbooks

Similar questions

What is the difference between a fixed input and a variable input?
Can you please check my answers for the following question? Mandy owns a small coffee shop. Her production function is q=2K0.5L where q is the number of cups of coffee produces, K is the number of coffee machines, and L is the number of employees. If K=10 and L=20, the marginal rate of technical substitution is: 1 MLP= 2K0.5 MLK = L/K0.5 MRTS= 2K/L = 2(10)/20 =1 MRTS = w/r Starting from 10 machines and 20 employees, if Joe hires one more employee, then he can use ______ fewer machine(s) and still produce the same quantity of coffee. 1 fewer machine
Joe 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.
Alex uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{L/4, K^0.8}.If he uses 1 kg of wool and 3 hours of labour, he can produce 1 t-shirt.1. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axis and wool on vertical. 2. Given that the price of labour is w=$10 and the price of each kg of wool is p=$6What is the optimal amount of labour and fruit to use to produce q T-shirts, if she wants to minimise costs? Draw on the diagram from 1.) by with corresponding isocost lines
Brian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{1/3L, 2K}.If he uses 1 kg of wool and 3 hours of labour, he can produce 1 t-shirt.1. Draw isoquants for q = 1 and q = 2 on a diagram with labour on the horizontal axis and wool on the vertical. 2. The pice of wage per hour is given by w=$10 and the price of each kg of wool is given by r=$4. What is the optimal bundle of that he can produce in order to minimise costs? Draw the isocost lines.