Discuss the impact of the following factors on the optimal method of procuring input Benefits from specialization Bureaucracy cost Opportunism on either side
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Discuss the impact of the following factors on the optimal method of procuring input
- Benefits from specialization
- Bureaucracy cost
- Opportunism on either side
- Specialized investments
- Unspecified events
- Barging cost
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- A firm has the production function F(L, K) = L^1/2 + K^1/2The price of labor is $10 and the price of capital is $15. The firm has a production goal of Q = 100 units ofoutput.a) Neatly specify this firm’s cost minimization problem, using the particulars associated with this problem.b) Give two equations that an interior solution satisfies, tailoring your equations to the particulars of thisproblem.c) Solve the two equations for the firm’s optimal choice. Show your work.please analyze interaction ofmarginal cost and average cost numerically and derive the formula of thisrelationship with respect to relevant mathematical economics theory and interpret yourformulaAn isocost line identifies The leat costly combination of inputs needed to produce a given level of output. The relative prices of inputs. The technological relationships among inputs. The rate at which one input can be substituted for another in the production process.
- what are two key problems that arise for the modern marginalist theory of the firm when the firm has a constant-returns-to-scale (CRS) technology?Discuss the impact of the following factors on the optimal method of procuring an input. a. Benefits from specialization. b. Bureaucracy costs.c. Opportunism on either side of the transaction. d. Specialized investments. e. Unspecifiable events. f. Bargaining costs.A firm uses labor and machines to produce outputaccording to the production function f(L, M) = 4L1/2M1/2, where L is the number of units of laborused and M is the number of machines. The cost of labor is $40 per unit and the cost of using amachine is $10.1. Draw an isocost line for this firm, showing combinations of machines and labor that cost $400and another isocost line showing combinations that cost $200.2. Suppose that the firm wants to produce its output in the cheapest possible way. Find thenumber of machines it would use per worker. (Hint: The firm will produce at a point wherethe slope of the production isoquant equals the slope of the isocost line.)
- Consider a firm that utilizes Labor (L) and Capital (K) to produce a product Q, and the technology is given by the production function: Q = aL + bK. The wage rate of labor and the rental rate of capital are given by w and r respectively. (i) Draw the family of iso-quants and show that in a properly labelled diagram. (ii) Draw the iso-cost lines and show those in the same diagram. Note that the shape of these curves will depend on the parameter values of a, b, w and r. (iii) If the firm’s objective is to minimize cost of production, how should the two factors of production be combined in order to produce a given level of output in least costly manner? In other words, work out the cost minimizing input combinations. (iv) Derive the cost function, the total cost of production as a function of output and draw the cost function. (v) Can you find an interrelationship between the nature of the production function and that of the derived cost function?Explain why optimal marks- up varyFor a subsistence agricultural household, which of the following happen when the price of the staple they are producing increases? [SelectMultiple] Group of answer choices Due to profit effect, their utility as producers increases. The impact on overall welfare of the household is ambiguous since it depends on the relative forces of profit effect and price effect. Their is no effect since subsistence households never sell or buy their staple production. Due to price effect, their utility as consumers decreases.
- Tripod Store has been so successful in Paris that it wants to set up a new operation in Nantes. Their long-run production func tion is Q = K2/3L1/3 The rental rate of capital is $12 and the wage is $10. The market price of cameras is $6, and Tripod expects to sell 1000 per month. a. What is the opti mal allocation of capital and labor (per month) for the new loc ation? b. In add ition to the price of labor and capital, Tripod will have to pay $8000 per month in fixed costs—rent, insurance, etc. Does this change your answer to part (A) above?In your city , each police officer has a budgetary cost of $40000 per year. The property loss for each burglary is $4000. The first offecer hired will reduce crime by 40 burglaries and each additional officer will reduce crime by half as much as the previous one. How many officers should the city hire ? Illistrate with a graph with a marginal benifit curve and a marginal cost curve Can someone answer this correctly with an MC and MB graph? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.If a higher level of production allows workers tospecialize in particular tasks, a firm will likelyexhibit _________ of scale and _________ averagetotal cost.a. economies; fallingb. economies; risingc. diseconomies; fallingd. diseconomies; rising
