In the Cost Minimization Problem, the isoquant curve for an output level equal to the output quota? Illustrates the cost of labor and capital a firm pays to produce a level of output in excess of an output quota. Illustrates all combinations of labor and capital that a firm cannot afford. Illustrates all combinations of labor and capital that a firm can afford. O Illustrates all combinations of labor and capital that a firm can use to produce a level of output equal to the outpu
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- If two painters can paint 200 square feet of wall in an hour, and three painters can paint 275 square feet, what is the marginal product of the third painter?Suppose that the production function for a phone is ? = 20K^0.5L ^0.5 . The marginal product of labor is 10(k/l)^0.5 , and the marginal product of capital is 10(L/K) ^0.5 . Suppose that labor can be hired for $6 and capital can be hired for $9. a. When the firm is producing 49 units at lowest cost, what will the firm’s marginal rate of technical substitution be? b. Solve for the lowest-cost combination of labor and capital that will allow the firm to produce 49 phones. Fractional units of labor and capital are allowed. c. What is the minimum cost of producing 49 phones?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.
- 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 linesCan 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 machineIsoquant curves and isocost curves are tools that can explain how a firm might best respond to changes in the production environment. Present an example of an isocost curve where labor and capital are the two inputs, and explain what it is using language someone not trained in economics could understand. Present an example of an isoquant in the same diagram you used for your isocost curve, and draw the isoquant so it cuts the isocost curve twice. Explain what an isoquant is using language someone not trained in economics could understand. Label the two points A and B, where the isocost and isoquant curves intersect. Present a logical argument that explains why the firm should operate neither at point A nor point B, and present a point that would be optimal by drawing a new isoquant curve in the diagram. Add a second isocost curve to your diagram such that the firm is spending more money on inputs. Add a third isoquant to your diagram to show a firm that would become more capital…
- 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.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)?Explain how a firm’s production function is related toits marginal product of labor, how a firm’s marginalproduct of labor is related to the value of its marginalproduct, and how a firm’s value of marginal productis related to its demand for labor
- Prunella raises peaches. She uses L units of labor, and T units of land to produce peaches. Her production function is f(L, T)= L1/2T 1/2 A: Write the equation and plot the isoquant for the output quantity 4. B: What is the returns to scale of this production function? C: Find the marginal products of labor and land. What is the rate of technical substitution between land and labor? D: In the short-run, Prunella cannot vary the amount of land she uses. Plot the output as a function of labor only for the fixed level of land of T=1. E: Find the marginal product of labor from L=4 and show it on the graph. Is the marginal product of labor diminishing, constant or increasing in labor? F: Suppose wages are constant and equal w, fixed costs are zero. Find the short-run profit maximizing level of labor for T=1. Please see the attached photoAssume that you are studying an economy which produces two goods, x and y, using two factors of production, capital K and labour L. The economy’s overall quantities of the two factors are given, and the capital intensity (the capital-to-labour ratio) in the production of y is always higher than the capital intensity in the production of x. At present there is an excess supply of y. Explain and illustrate graphically what will happen in the long run to:1) Prices of goods and production.2) factor prices and factor use intensities in each sector.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.