QUESTION 3 Let c(w1; w2; y) be a cost function, and let A > 1. We have: Oa.q A w; Aw2; y) = o(w1; w2; y) O b.q A w1; Aw2; y) = Ac(w1; w2; y) Oc. d A w1; Aw2: y) > Ao(w1; w2; y) Od.( A w1; Aw2: y) < Ao(w1; w2; y)
Q: q4- Total cost increases from $500 to $600 when output increases from 20 to 30 units. Fixed costs…
A: Answer: option d (Average total cost falls) Explanation: Average total cost=Total costoutputAverage…
Q: The monthly cost function, in dollars, for a coffee maker factory is C(x) where x is the number of…
A: Cost function for a coffee makers produced= C(x) where; x= Number of makers produced Total cost;…
Q: Diane is remodeling an apartment that she will rent out to a college student. The renovation is…
A: Answer: Marginal cost: marginal cost refers to the additional cost of producing an additional good.…
Q: A product requires 14 hours to complete the first unit. Managerial experience has estimated the…
A:
Q: A soda bottling plant uses are capital (K), electricity (E) and raw materials (R) in production. Its…
A: We are going to solve for marginal rate of technical substitution to answer this question.
Q: Liza owns a small bakery company catering for gourmet cakes and pastries. Her fixed cost is the cost…
A: Total cost is the summation of fixed cost and Variable cost . TC = FC +VC
Q: Stage 1 of production starts at Q = and ends at Q = where we find the diminishing marginal returns…
A: TP = Total Product AP = Average Product MP = Marginal Product
Q: If you know that with 10 units of output, average fixed cost is OMR 22.50 per unit and average…
A: Average cost = average fixed cost + average variable cost
Q: Adam operates a factory that produces beach towels. His current level of output equals 1000 towels…
A: Average total cost is referred to as the sum total of all production costs divided by the total…
Q: When marginal cost exceeds average total cost, which of the following must be true? Question 14…
A: Costs are the expenses that a firm incurs in the form of the purchase of inputs to produce goods and…
Q: technological change that permanently lowered energy costs would cause the: Group of answer…
A: In an economy, there are various factors that influence the aggregate demand and aggregate supply…
Q: 3- Given the total-cost function C(Q) = Q³ – 5Q² + 12Q + 75, Write out the marginal cost function.…
A: Marginal cost indicates the extra cost of producing one additional unit of output. The function for…
Q: A labor crew for placing concrete consists of one labor foreman at $26.70 per hour, one cement…
A: Duration (D) in 8 hours. One labor cost (LC) is $26.7. One cement finisher (CF) is 29.30. one…
Q: Economist describe short run decisions as constrained decisions while long run decision are…
A: In the short run, few costs are fixed and few are variable but in the long run their will be no…
Q: Modified True or False: State whether each statement is true or false. If the statement is false,…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Discuss the impact of cost trade-off of the following: (a) Longer production runs…
A: Part (a) Longer production runs producing syringes will lead to lower unit cost i.e., the decrease…
Q: Julia and Ralph need to decide which one of them will take time off from work to complete the rather…
A: From the situation given here, we see that Julia and Ralph both have daily jobs to do for which they…
Q: Calbee spent $100 to make 10 face shields. Calculate the average fixed cost of each face shield if…
A: Given Total Cost = $100 Quantity = 10 units Total Variable Cost = $50 Total Cost = Total Fixed…
Q: Consider an industry in which the production technology yields the cost function C(Q)=1800+(3Q)².…
A: Sub-additive of a function f: such that f (x + y) ≤ f (x) + f (y) for all values of x and y. Given…
Q: XYZ Enterprises produce slippers in 10 different designs. It takes one hour (and PhP20,000) to set…
A: Economies or cost savings arising due to volume of production are called economies of scale.…
Q: When ONLY total costs (TC) are known, such as shown in Table 1 below, explain how to calculate each…
A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…
Q: This question illustrates the argument on p.114 of the book. A and B own neighboring properties.…
A: "Since you have posted a question with multiple sub -parts,we will solve first three sub-parts for…
Q: QUESTION Sahar is analyzing the probability to open her own beauty salon. If she chooses to operate…
A: Answer - Given in the question - Rent = Rs 70,000 PM salary of staff = RS 30,000 pm Earning = RS…
Q: A motor vehicle assembly plant requires the use of both capital and labour. The Tesla manufacturing…
A: According to the law of diminishing returns when more units of variable input are used with a fixed…
Q: Of two optional actions, the sum of the numbers that measure the costs and the benefits that would…
A: Decision making is the key component in the business. Many types of decisions are available which…
Q: The following table states pre-Covid round-trip airfares (for a two-week trip in February, booked…
A: Price discrimination refers to when the firm charges different prices to different customers for the…
Q: Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in…
A: Production cost is the monetary value incurred on factor of production . And average total cost is…
Q: Your firm specializes in recycling used plastics into consumer goods. You have three production…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Which one of the following types of short-run costs declines over the whole range of output? a.…
A: There are different types of cost associated with economic activities specially production…
Q: 3. Minimize the following total cost function: TC =Q3 – 10Q2 + 48Q + 46.
A: Given Total cost function TC=Q33-10Q2+48Q+46 ......(1) We will use application of…
Q: If the marginal cost of producing the seventh unit of output is $9, then the total cost of producing…
A: The marginal cost is the change in the cost because of the change in the output. The marginal cost…
Q: Suppose a Cobb-Douglas Production function is given by the function: P(L,K)=8L^0.7K^0.3 Furthemore,…
A: Given Production function: PL,K=8L0.7K0.3 ...... (1) Cost function:…
Q: You have been hired by Kia as manager for its Pakistan operations. Assume following is the short-run…
A: When L1 = K1 = 1, Q1 = 60 x (1)0.3 x (1)0.7 = 60 x 1 = 60 When L2 = K2 = 2, Q2 = 60 x (2)0.3 x…
Q: Q61 If a firm's total fixed costs are $100 and average variable costs are constant regardless of…
A: Let the constant average variable cost be $10 The total fixed cost be $100 Output TFC AFC…
Q: QUESTION 3 Let c(w1; w2; y) be a cost function, and let A > 1. We have: Oa. ( A w1; Aw2: y) = c(w1;…
A: Hi there , as you have posted multiple question, as per our guidelines we are only allowed to answer…
Q: Label each of the following as sunk cost, opportunity cost, or incremental costs and briefly explain…
A: The whole cost of producing a product may be included in a company's financial records as the cost…
Q: Consider the accompanying breakeven graph for an investment, and answer the following questions.(a)…
A: Break-even point: The breakeven point is the degree of creation at which the expenses of creation…
Q: 6. Optimize the Cobb-Douglas production function given the following parameters. The maximum 12 and…
A: Here taking derivatives with the function given with respect to L & K: With respect to…
Q: The activity driver for the packing activity is the number of packing hours. Product A uses 50…
A: The consumption ratio is calculated by dividing the value of a product by the sum of the value of…
Q: The Cobb-Douglas production function for a particular product is N(x.y) = 60x"y4, where x is the…
A: Production function: N (x,y) = 60x0.6y0.4 Wage per labor (w) = $40 Rent per capital (r) = $120…
Q: What do a firm's opportunity costs of production amount to? Question 13 options: explicit…
A: Opportunity Cost is the value of next best alternative sacrificed.
Q: The small family company that you manage has invested $35,000 in developing a new product, but the…
A: When individuals or firms makes economic decision, they generally make cost-benefit analysis to know…
Q: PROBLEM #3 An auto parts manufacturer uses a production process for one of its parts that has a…
A:
Q: You are a manager at Glass Inc.—a mirror and window supplier. Recently, you conducted a study of the…
A: Marginal product of labor refers to change in the total production due to change in the one unit of…
Q4
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- 10)Given the production function f (L K) = L2 / 3. K1 / 3, where L is the working hours and K is the capital. assuming that the capital price is r = 4 euros and the price per hour of work is w = 27 euros and that all the factors of production are variable, what is the minimum cost of producing 10 units of product? Choose one: A) 260e B) 230e C) 240e D) 250e E) 270eThis question illustrates the argument on p.114 of the book. A and B own neighboring properties. Beneath their properties is a common well that contains 200 units of oil. The cost to A of extracting oil from the well in period t depends on the number of units of oil in the well at the beginning of the period t, ut, and the number of units of oil A extracts in period t, xAt ; specifically, the average cost of extraction for A per unit in period t is xAt /ut. The analogous cost function for B is xBt/ut. The market price of a barrel of oil is 1, there are two periods (t = 1, 2), and the discount rate is zero. The oil is a common property resource. a) (2) Suppose that A and B "unitize" and cooperatively decide how much oil to extract, and split the profit between them. The jointly profit-maximizing policy is that each extracts 50 units of oil from her well in each of the first two periods, after which the well is dry. How much discounted profit will A and B each make? b) (2) Suppose…A firm has a production function of q=2(LK), where the L represents hours of labor, K represents hours of machine usage and q represents the hourly production volume. Currently the price of labor is $20 per hour and the price of capital is $40 per hour. a. When the production level is at 40,000 units, use the LaGrange process to determine how much they should spend on labor and capital. b. If the purchasing agent requests an additional unit (40,001st unit), what is the minimum price you should charge on that specific unit? (Note: determine this without re-solving the Lagrange problem itself.)
- Suppose a Cobb-Douglas Production function is given by the function: P(L,K)=8L^0.7K^0.3Furthemore, the cost function for a facility is given by the function:C(L,K)=300L+500KSuppose the monthly production goal of this facility is to produce 20,000 items. In this problem, we will assume LL represents units of labor invested and KK represents units of capital invested, and that you can invest in tenths of units for each of these. What allocation of labor and capital will minimize total production Costs?Units of Labor LL = (Show your answer is exactly 1 decimal place)Units of Capital KK = Incorrect (Show your answer is exactly 1 decimal place)Also, what is the minimal cost to produce 20,000 units? (Use your rounded values for LL and KK from above to answer this question.)The minimal cost to produce 20,000 units is $ Hint: Your constraint equation involves the Cobb Douglas Production function, not the Cost function. When finding a relationship between LL and KK in your system of…A small bank is trying to determine the number of tellers to employ. The total cost of employing a teller is $100 per day, and a teller can serve an average of 160 customers per day. On average, 210 customers arrive per day at the bank, and both service times and interarrival times are exponentially distributed. If the delay cost per customer day is $200, how many tellers should the bank hire?question 8 For each of the following situations, Find the Total Cost function, TC(q) Identify the optimal input mix, L* and K* for the given q. A) q = 2*MIN(L,5K); w = 8, r = 10; i) (5 points) TC(q) = __________________ ii) (4 points) q = 20 L* = _________________ K* = _________________
- Your firm specializes in recycling used plastics into consumer goods. You have three production opportunities: 1. You can produce plastic utensils for a revenue of $30,000 while production will cost $15,000. 2. Alternatively, you can produce lampshades: you calculate that at the optimal production, you expect to sell 2,000 lampshades every year at $10 each, and your average total cost per lampshade will be $2. 3. You also have the option to shut down your factory and produce nothing at a cost of $1,000 a year. Which opportunity do you choose? 4 Instead of working hard, Kendall Square Inc’s manager can shirk and not improve costs. In order to incentivize her hard work, Kendall Square Inc’s shareholders want to give the manager a bonus if they see that variable costs are cut by half. What is the maximum bonus that shareholders would be willing to give?Q3, A firm operates with the following Cobb-Douglas production function where Q is output, L is labor hours per week, and K is machine hours per week. Cobb-Douglas Production Function: Q = 5(L1/3K2/3) The firm intends to produce 5,000 units of output per week by contracting employees for $40 per hour and renting machinery for $10 per hour. Determine the cost minimizing combination of labor and capital for the firm. Based on your solution in part (a), calculate the firm’s total cost of producing 5,000 units of output per week.A firm produces output according to the following production function:Q = F (K, L) = 4K + 8L(a) How much output is produced when K = 2 and L = 3?(b) If the wage rate is $60 per hour and the rental rate on capital is $20 per hour, what is the costminimizing input mix for producing 24 units of output?(c) If the wage rate decreases to $20 per hour but the rental rate on capital remains at $20 per hour,what is the cost minimizing input mix for producing 24 units of output?
- Suppose that the production function takes the form X = min(10L, 5K) and that a competitive firm faces a wage rate of £60 per week and a weekly capital rental of £32. (a) How much must the firm spend to produce 100 units of output, and what is the average cost of production when X = 100? (b) What is the incremental cost of producing the 101st unit of output? (c) What happens to the cost of producing 100 units of output if the wage rate and the rental cost of capital rise by 25 per cent each? What happens to the average and marginal cost? (d) What happens to the cost of producing 100 units of output if the wage rate increases by £1, or if the cost of capital increases by £1?(You will need to use a spreadsheet to tackle these questions.) 1. How much of q can be produced for £60,000 if the total cost function is TC = 86 + 152q − 12q2 + 0.6q3? 2. What output can be produced for £150,000 if TC = 130 + 62q − 3.5q2 + 0.15q3? 3. Solve for x when 0 = −1,340 + 14x + 2x2 − 1.5x3 + 0.2x4 + 0.005x5 − 0.0002x6Modified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. Spreading overhead is the process of dividing total fixed costs by more units of output, which implies that average fixed cost declines as quantity declines. Diminishing returns, or decreasing marginal product, imply diminishing marginal cost. At the output level where MR = MC, if the corresponding P is above AVC but below ATC, the loss-minimizing move is to shut down or stop production. A firm that is breaking even, or earning a zero level of profit, is one that is earning exactly a normal rate of return, which implies that new investors are not attracted, but current ones are not running away either. Zero economic profit implies zero accounting profit. In the long run, if price is below average total cost, then it pays to just shut down. The shapes of long-run cost curves follow directly from the assumption of a fixed…
