Suppose that widgets can be produced using two different production techniques, A and B. The following table provides the total input requirements for each of five different total output levels. Q=1 Tech. K L A 4 B Total Cost Assuming that the price of labor (PL) is $1 and the price of capital (P) is $3, calculate the total cost of production for each of the five levels of output using the optimal (least-cost) technology at each level. Q=2 KL 6 2 13 2 5 To do this, complete the table below by calculating the total cost of production, filling in the missing values using the optimal (least-cost) technology at each level. (Enter your responses as whole numbers.) L K Q=3 Q=4 Q=5 K L K L K L 7 11 8 9 4 12 4 8 5 12 7 15 Q=1 Q=2 $6 $ 11 Total Cost How many labor hours (units of labor) would be employed at each level of output? How many machine hours (units of capital)? To answer this, complete the table below for the units of labor and units of capital that would be used to produce each level of output. (Enter your responses as whole numbers.) L K Q=3 $ 20 Q=4 $ 27 Q=1 Q=2 Q=3 Q=4 3 5 8 12 1 2 4 5 Q=1 Q=2 $7 $12 Q=5 $ 36 Graph total cost of production as a function of output. 1.) Using the multipoint curved line drawing tool, graph total cost of production as a function of output. Put cost on the y-axis and output, q, on the x-axis. Label your line 'Total Cost'. Again assume that the optimal technology is used. Note: Carefully follow the instructions above and only draw the required object. Now assume the price of labor (PL) is $3 and the price of capital (PK) is $1. Calculate the total cost of production for each of the five levels of output using the optimal (least-cost) technology at each level. Q=5 15 7 To do this, complete the table below by calculating the total cost of production, filling in the missing values using the optimal (least-cost) technology at each level. (Enter your responses as whole numbers.) Q=5 Q=3 Q=4 $21 $ 33 $ 35 How many labor hours (units of labor) would be employed at each level of output? How many machine hours (units of capital)? To answer this, complete the table below for the units of labor and units of capital that would be used to produce each level of output. (Enter your responses as whole numbers.) Q=1 Q=2 Q=3 Q=4 Q=5

Suppose that widgets can be produced using two different production techniques, A and B. The following table provides the total input requirements for each of five different total output levels. Q=1 Tech. K L A 4 B Total Cost Assuming that the price of labor (PL) is $1 and the price of capital (P) is $3, calculate the total cost of production for each of the five levels of output using the optimal (least-cost) technology at each level. Q=2 KL 6 2 13 2 5 To do this, complete the table below by calculating the total cost of production, filling in the missing values using the optimal (least-cost) technology at each level. (Enter your responses as whole numbers.) L K Q=3 Q=4 Q=5 K L K L K L 7 11 8 9 4 12 4 8 5 12 7 15 Q=1 Q=2 $6 $ 11 Total Cost How many labor hours (units of labor) would be employed at each level of output? How many machine hours (units of capital)? To answer this, complete the table below for the units of labor and units of capital that would be used to produce each level of output. (Enter your responses as whole numbers.) L K Q=3 $ 20 Q=4 $ 27 Q=1 Q=2 Q=3 Q=4 3 5 8 12 1 2 4 5 Q=1 Q=2 $7 $12 Q=5 $ 36 Graph total cost of production as a function of output. 1.) Using the multipoint curved line drawing tool, graph total cost of production as a function of output. Put cost on the y-axis and output, q, on the x-axis. Label your line 'Total Cost'. Again assume that the optimal technology is used. Note: Carefully follow the instructions above and only draw the required object. Now assume the price of labor (PL) is $3 and the price of capital (PK) is $1. Calculate the total cost of production for each of the five levels of output using the optimal (least-cost) technology at each level. Q=5 15 7 To do this, complete the table below by calculating the total cost of production, filling in the missing values using the optimal (least-cost) technology at each level. (Enter your responses as whole numbers.) Q=5 Q=3 Q=4 $21 $ 33 $ 35 How many labor hours (units of labor) would be employed at each level of output? How many machine hours (units of capital)? To answer this, complete the table below for the units of labor and units of capital that would be used to produce each level of output. (Enter your responses as whole numbers.) Q=1 Q=2 Q=3 Q=4 Q=5

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

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