Identify the returns to scale (increasing, constant, or decreasing) for the following production functions. 1) Q =100K²L² 2) Q = 2K +3L 3) Q =2K% +21%
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- Draw a theoretical inverted abatement cost curve when the Marginal Rate of Transformation is constant. Remember to label your axesDemand for a company’s product is given by the following equation: Q=1000-0.5P. You are also given that its total cost function TC=100+1000Q. Compute the profit maximizing price and quantity B. A firm earns an accounting profit of K150, 000 per year in project A. The firm could earn K150, 000 and K120, 000 in investments B and C, respectively. How much economic profit is the firm earning assuming the three projects are mutually exclusive?1. The amount of fixed factory costs applied to the product during the first 6 months under absorption costing is? A. Over-applied by $20,000. C. Under-applied by $40,000. B.Equal to the fixed costs incurred. D. Under-applied by $80,000. 2. Reported net income (or loss) for the first 6 months under absorption costing is? A. $160,000 B. $0 C. $40,000 D. $(40,000) 3. Reported net income (or loss) for the first 6 months under variable costing is? A. $180,000 B. $40,000 C. $0 D. $(180,000)
- The cost, in millions of dollars, of building a three-story high school in NewYork State was estimated to be: 2C x x x x 1.7 0.14 0.0001 20 400where x is the number of thousands of square feet. Suppose that you arecontemplating building a for-profit three-story high school and estimate thatyour total revenue will be $0.2 million dollars per thousand square feet.(a) What is minimum area for a three-story high school in New YorkState, that this model covers? (b) What is the variable cost of building a three-story high school in NewYork State? (c) What is the fixed cost of building a three-story high school in NewYork State? (d) Determine the profit function,P x( ), for building a three-story highschool in New York State? . (e) Determine,P(250) , for building a three-story high school in New YorkState, and interpret the result. (f) How many thousands of square feet should a three-story high schoolbuilding in New York State be in order to break even?Assume that B = -Q 2 + 4,500Q and C= 2Q 2 are the benefits and costs of increasing the units of X-brand energy drink (in a 500 ml bottle).A. What is the profit function of X-brand energy drink production?Suppose a tax is set at t’ in the figure. How many units of emissions are ABATED and is abatement achieved cost effectively? Suppose a regulation has just been implemented requiring that coal-fired power plants pay a tax of $80 on each unit of emissions (1 unit is 1 metric ton). Before the tax was imposed, a plant called Old River Power had an emissions level of 100 units. Given a marginal abatement cost function of 200 – 2E, under the tax policy what will Old River Power pay the regulator in emissions taxes?
- Wonopoly and natural resource prices Suppose that a firm is the sole owner of a stock of a natural resource. a. How should the analysis of the maximization of the discounted profits from selling this resource (Equation 17.63 be modified to take this fact into account? b. Suppose that the demand for the resource in question had a constant elasticity form q(t)=a[p(t)]b . How would this change the price dynamics shown in Equation 17.67? c. How would the answer to Problem 17.7 be changed if the entire crude oil supply were owned by a single firm?7-16. Economists at Jensen Enterprises used time-series data to estimate the following total cost function for the firm: TC=200-2Q+0.05 Where TC is total cost and Q is the output rate. a. Determine an equation for the average cost function. Plot this function, and find the output rate that minimizes average cost. b. Is the production process characterized by decreasing, constant, or increasing returns to scale? c. If the market price of output is $4.32 per unit, is there a scale of plant that would allow the firm to earn an economic profit or at least to break even?Which of the ff statements are true about cost function a. It estimate the total cost of production given a specific budget b. It helps predict what the marginal cost would be to produce a product at different levels of output c. It allows management to evaluate how efficiently the production process was at the beginning of the operation period d. It helps manager understand the price behavior of the product A firm profit maximization point is where a. Total revenue Is greater than total cost b. Marginal revenue is equal to marginal cost c. Marginal revenue is greater than total cost d. Marginal cost is less than total cost
- Constrained Optimization A firm's total cost function is: C = 6x2 - xy + 10y2 + 30, subject to the production quota x + y = 34. Construct the Lagrange function and solve for the equilibrium values. Calculate the total cost. What is the equilibrium value of x? What is the equilibrium value of y? What is the equilibrium value of λ? What is the optimized value of cost? What is the value of the determinant of the bordered Hessian matrix? Based on the value of the determinant of the bordered Hessian matrix, comment on the optimized value of Cost. (Answer in one word.)The cumulative learning curve coefficient CLCC(20, 0.8) is defined as follows:a. the cost to produce 20 units in a process with c(1) = 1 and a learning rate of 0.8.b. the cost to produce one unit in a process with c(1) = 20 and a learning rate of 0.8.c. the cost to produce one unit in a process with c(1) = 1 and a learning rate of 0.820.d. the cost to produce the 20th unit in a process with c(1) = 1 and a learning rateof 0.8.Glen Eira City Council wants to impose a tax to fish and chips shops. It is considering two types of tax:- a lump sum of 500$ on each fish and chips owner- a tax of 2$ per kg of fish and chips sold, paid by each fish and chips owner(a) Which cost curve would shift as a consequence of each type of tax? (AFC, AVC, (b) Consider the following table of long-run total cost for three different fish andATC, MC)?
