Suppose a firm is currently producing where MPL=5 and MPK=10.  The cost of labor is w=40 and the cost of capital is r=60.  In the long run, the firm can lower its cost by a. continuing to produce at the existing input quantities b. increasing capital and decreasing labor c. decreasing capital and increasing labor   d. lower the wage rate while increasing the rental rate

Q: 12 true or false The point at which the marginal product of a variable input is at a maximum…

A: The production function is a border or frontier that denotes the greatest quantity of output that…

Q: 4. Select the production function with increasing returns to scale: A. q = (L+ 1)K B. q = (VI + VR)²…

A: To get which function has what type of scale we will scaled up the factors of production by 2 to…

Q: What is relationship between MP and AP? Explain why MP first rises, then declines and ultimately…

A: The given table has been completed and the corresponding graphs of (MP and AP) have also been…

Q: A producer has the following technology.y= 6K^(1/2)L^(1/2) a) Prove formally that the production…

A: Since you posted a question with multiple sub-parts, we will solve first three sub-parts for you. To…

Q: Capital (K) Labor (L) Output (q) 8 0 0 8 1 6 8 2 13.5 8 3 23.5 8 4 31 8 5 37 8 6 42 8 7 46 8 8 49 8…

A: Given information

Q: 2) The production function of a factory has the following characteristics: • Use workers (x1) and…

A: Production function shows relationship between output and inputs.

Q: A. Explain how MP = decreasing within the Cobb - Douglas function ( explain the functions and their…

A: Cobb- Douglas production is the technological representation of the two input production approach in…

Q: 16. Consider the production process undertaken by a firm. Which of the following would imply that…

A: A long run is a situation where inputs are variable and prices are adjusted. Firms can expand or…

Q: 11. In any production process, the marginal product of labor equals A. the value of total output…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: 4. The law of diminishing returns only applies in case where there is at least one fixed factor of…

A: Law of diminishing returns: It explains the production behavior in the short-run. The law of…

Q: 3. In the short term, a company has the following cost function and product function. C(N)= 10 000 +…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: 2. A firm has a production function of q= 0.25KL05 and in the short-run capital is fixed at 100 (K =…

A: Given  Production function of the firm q=0.25KL0.5   .......... (1)  In short run  Capital is fixed…

Q: a) Explain what is meant by the terms marginal cost and decreased cost in production theory, and…

A: Disclaimer :: as you posted multiple questions we are supposed to solve the first one only. Cost is…

Q: 5. You own a business that answers telephone calls for physicians after their offices closes. You…

A: The measure that depicts the use of one good in place of another good is known as substitution. When…

Q: 6. Suppose that a firm has the following production function: Q = min{L, K} and %3D rent = wage = 2.…

A: Production function : Q(K , L ) = min {L ,K  }  This production function is an example of perfectly…

Q: 18. If a firm increases all of its inputs by 10 percent and its output increases by 10 percent,…

A: The law of returns to scale is a long run concept where all the factors are variable. For simplicity…

Q: How the shape of the total variable cost curve (TVC) and total cost curve (TC) is related with the…

A: Cost refers to the financial valuation of products and services purchased by manufacturers and…

Q: 6. Consider the following Cobb - Douglas utility function: U = χαγβην *Note, it should be assumed…

A:

Q: 1. Why do marginal costs tend to rise, and marginal benefits tend to fall? Explain.

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Please only do 4 and 5 not 1 2 or 3 Suppose a firm’s production function is K^1/3  L^2/3 Mpk=…

A: Suppose a firm’s production function is K^1/3  L^2/3 Mpk= L^2/3 / 3K^2/3  MpL=2K^1/3 /  3L^1/3

Q: 3. The equation of the production function for calculators is q = 5KL + 30L, where q is total…

A: Given the information: q = 650 unitsq = 5KL + 30LK = 20 units

Q: ADVANCED ANALYSIS A firm faces the following costs: total cost of capital = $1,000; price paid for…

A: The firms in the industry are liable to estimate their costs and the benefits for production…

Q: 10. Suppose a firm must pay an annual tax, which is a fixed sum, independent of whether it produces…

A: The average cost of a firm is the sum of average fixed cost and average variable cost. The average…

Q: A firm's marginal product of labor is 20 and its marginal product of capital is 24. The wage rate is…

A: In long run both labour and capital are changeable factors and firms exhibit return to scale .…

Q: ADVANCED ANALYSIS A firm faces the following costs: total cost of capital = $1,000; price paid for…

A: We’ll answer the first question only that you have specified. Please submit a new question…

Q: 45. The short run A. O Is less than one year B. O Requires that at least one input is fixed C. O…

A: Labour includes physical and mental effort by humans throughthe use of human capital (education,…

Q: Refer to the information provided in Table 16.1 below to answer the question(s) that follow. Refer…

A: Here, the given table shows the combination of labor and capital used to generate output at…

Q: QUESTION 5 Harryhausen's produces sushi with labor and capital The price of labor is w = 1, and the…

A: Q = L + K When K = 2, Q = L + 2 Since Q = 3, 3 = L + 2 L = 1 Short run total cost (STC) = wL + rK…

Q: The Paunch Burger restaurant chain currently produces 250,000 units of output by using 2,400 units…

A: Marginal rate of technical substitution =  - Change in capital / Change in labor

Q: A firm uses two inputs in production: capital and labor. In the short run, the firm cannot adjust…

A: The factors of production refers to all the inputs which are used in the production off goods, and…

Q: 2. COMPUTE FOR MP AND AP. EXPLAIN. B. SHORT-RUN PRODUCTION FUNCTION WITH Y=2 Units of Total Variable…

A: "In short-run there is one input which is fixed and the other input is variable. Marginal product of…

Q: a) Explain The Law of Diminishing Returns. b) Distinguish between the terms short run and long run…

A: In the production process, different inputs are used to produce the final output. Each input has its…

Q: 1. What is the fixed input use in this production? 2. What is the variable input use in this…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Suppose the production function is Q = 8L + 15K where Q is the quantity of output, L is the quantity…

A: Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: 7. The unit price of production input K is 8 euros and the unit price of production input L is 10…

A: Answer: Given, Price of K = 8 euros Price of L = 10 euros Production function: Y=K/4+L To find:…