If a firm is using optimal input proportions, it is minimizing its costs

Q: Assume the Cobb-Douglas production function is Q= L ^0.75 K^0.5 and if price of labor per day is 5…

A: Given  Q =L0.75 K0.5     ......... (1) Price of labour = 5 birr per day  Price of capital = 10 birr…

Q: The law of diminishing returns happens when each additional unit of a variable input results in a…

A: The law of diminishing returns is also known as law of variable proportion. It is applicable on…

Q: A bottling company uses two inputs to produce bottles soft drink sludge: bottling machines (K) and…

A: The optimal input bundle i.e. the cost minimizing input bundle is where the marginal product per…

Q: The total cost equation for producing X widgets is given by TC = $1,000 + $6X. The average cost per…

A: Answer - Given in the question - TC = $1,000 + $6X Here  TC = Total cost  X is no. of widget  Need…

Q: Modified True or False: State whether each statement is true or false. If the statement is false,…

A: Optimal scale of plant is the scale of plant where costs are minimized. As the word optimal suggests…

Q: Can you differentiate which is the best and which is the worst between Constant Cost Condition,…

A: In a perfectly competitive market, the long-run industry supply curve explains the relationship…

Q: Which of the following does not refer to diminishing marginal returns? O Increasing numbers of seat…

A: Diminishing marginal returns means the productivity or output falls with increase in the units of…

Q: Which of the following statements is (are) correct? (x) If marginal cost is less than average total…

A: Average total cost refers to total cost per unit of output. Average total cost is the sum of average…

Q: When a firm is using a technically efficient input combination, the firm is also producing in an…

A: False statement

Q: short-run with a fixed amount of at least one input, the Law of Diminishing Returns must apply,…

A: The law of deminishing marginal returns is one of the key standards of financial matters and is…

Q: Use Exhibit 2. For Comfy Chair Factory, which of the following statements is (are) correct? (x) The…

A: Total cost is the summation of Fixed cost and variable cost . Where varible cost when there is no…

Q: What is meant by an expansion path? Illustrate expansion paths for a normal input and an inferior…

A: The expansion path may be defined as the locus of the points of tangency between the Isoquant curve…

Q: Which of the following relationship is correct? When marginal cost (MC) starts to increase; average…

A: MC is the slope of TC(total cost). ATC is the per unit cost of product obtained by the ratio of TC…

Q: Assume a standard marginal cost curve and average cost curve for firms producing cellular phones.…

A: Points to be considered: * Technological advancement increases the production/output. * MC and AC…

Q: A firm has a production function QL,K=100L0.4K0.6 with a cost function CL,K=5L+30K. What is the…

A: Q(L,K)=100L0.4K0.6 C(L,K)=5L+30K w=5 r=30 Q=1000   MPL=dQ/dL=0.4(100)L-0.6K0.6 MPL=40L-0.6K0.6…

Q: Often the marginal cost (MC) is initially decreasing as Q rises because... the marginal productivity…

A: Marginal product refers to change in total output due to an addition of one more unit of input.

Q: A fast food restaurant currently pays $5 per hour for servers and $50 per hour to rent ovens and…

A: Cost of production: These are the expenses faced by a firm for producing goods and services.

Q: Assume that the marginal cost of production is increasing. Can you determine whether the average…

A: AVC is the cost which is measured by dividing average cost by the quantity of output produced.  MC…

Q: Companies can typically maximize their prots by operating at the minimum average total cost curves,…

A: Economic profit= (Price-ATC) *Quantity

Q: Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero.…

A: So  FC=$6 VC=7×$10       =$70

Q: A Cobb-Douglas production function means that as long as either of the 2 input is nonzero, the…

A:

Q: The cost curve for producing widgets passes through the following points and is piecewise linear in…

A: Given Information: Units produced Costs 0 $600 200 $1200 400 $1600 600 $1800 The fixed…

Q: True or False The slope of the total cost curve is equal to marginal cost, or the change in…

A: Total cost It refers to all the cost or expense that is incur in a production process.It is given by…

Q: If c=3q-3q2+q3is a cost function, when is marginal cost decreasing?

A:

Q: A farmer uses K units of machinery and L hours of labor to produce C tons of corn, with the…

A: An rational optimizing firm produces at the point where the marginal rate of technical substitution…

Q: Consider the following information about the input choices and prices, produci the same output in…

A: Cost minimization refers to optimal usage of factors of production such that for production of a…

Q: Suppose a shoes factory makes 100 pairs of shoes. At this level of production, they have $25 in…

A: Fixed cost is independent of output produced whereas variable cost varies with the level of…

Q: Suppose that average total cost is $60, average fixed cost is $25, marginal cost is $45, and output…

A: Given,  ATC = $60 AFC = $25   MC = $45 Output = 300.

Q: A factory that you are managing has an hourly production process that can be represented by the…

A: Answer -

Q: 1. If the average cost of a plant to produce a "q" unit is explained by the functions below this: C…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer one question at a…

Q: For the given cost function C(x)=250√x+ x^2/3375 -find a) The cost at the production level 1100…

A: Given: C(x) =250x+x23375

Q: As long as marginal cost is below average cost, average cost will be a. falling b. rising. .…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: A firm has a fixed production cost of $4000. For the first 100 units of production, the firm has a…

A: Given Information: Fixed cost = $4000 For the first 100 units, the marginal cost = $50 per unit…

Q: When thinking about cost analysis in Microeconomics, what are the real-world problems that occur…

A: Economies of scale are cost savings that can arise when a business expands the production scale and…

Q: Let a two-output cost function be given by: C(y1, y2) = y1+Y2+Y1Y2 – (y142)² + yž. Assume that y1 >…

A:

Q: Which of the following is always true?A) When marginal costs are less than average total costs,…

A: Below are the cost curves: (Sorry it’s a free hand diagram so it is not very neat)

Q: Assume there is a linear isoquant where the input combination  K = 10, L = 0 produces Q = 100.…

A: We have Linear Isoquant, a*L+ b*K = QWhen L=0 and K = 10, Q = 100a(0) + b(10) = 100b = 10;Therefore,…

Q: Which of the following statements is true? Group of answer choices If the marginal product of labor…

A: According to the law of diminishing returns as more units of the variable input labor is used with a…

Q: A firm produces plastic bins using labor (measured in man-hours) and capital (measured in…

A: Cost minimizing input combination is achieved when marginal rate of technical substitution is equal…

Q: In the long run, the farmer can change both his amount of land and his amount of labor. Suppose he…

A: The graph between labour and output is represented by the table given below, the production function…

Q: Consider the Cobb-Douglas production function: 1. Derive the conditional input demands. 2. Derive…

A: Given  Production function: f(x1,x2)=Ax1αx212-α                ... (1) Let P1 and P2 be the input…

Q: (iii) What part of the decreasing range is practically feasible? (iv) Write an equation for the…

A: The average (AC) cost function of the firm is, The first order condition is, The second order…

Q: Smarty’s Dish company manufactures household and commercial satellite dishes according to the…

A:

Q: Which statement must be false? a)  When a firm has increasing returns to scale in production, its…

A: Increase return to scale : where production  increase proportionally same as input increased. .…

Q: Given the total cost function TC = 100 + 40Q - 15Q2 + 5Q3, what is Average Total Cost (ATC)? A. ATC…

A: Average cost or unit cost is equal to total cost divided by the number of units of a good produced…

Q: Assume there is a linear isoquant where the input combination  K = 10, L = 0 produces Q = 100.…

A: The isoquant would result in the downward sloping curve which would result in various combinations…

Q: Marginal variable costs and marginal total costs are the same. True False

A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…