What is the difference between the factor demand derived from cost minimization and that obtained from the profit maximization? Under what conditions they can be the same?

Q: y= f(x1,x2)=x1ax2b Derive the equation for an isoquant curve.   If a=b=0.5 , the price of factor 1…

A: y= f(x1,x2)=x1ax2b a=b=0.5 the price of factor 1 is 12, the price of factor 2 is 3

Q: Suppose that hiring a third worker at the campus coffee shop increases sales from $115 per hour to…

A: marginal product of a person refers to the additional output by produced by a person when it…

Q: For the production function q = f(K, L) the ratio of the percentage change on K/L with percentage…

A: The elasticity of a ratio of two inputs to a production (or utility) function with respect to the…

Q: Explain the law of diminishing returns of a variable input. What is characteristic for total…

A: Law of diminishing returns to the variable input states that as the variable input keeps on…

Q: Differentiate between the Iso quant and Iso cost. If Iso quant is represented by Y = 1.7% K 25. and…

A: Isoquant is a line which shows the different combinations of two inputs which can produce the same…

Q: Average labour productivity is equal to A. the slope of the production function at the point (Y N)…

A: Average labor productivity measures the output produced per unit of labor.  It is calculated by…

Q: Consider a firm whose production function is f(L,K)=ALaKb. Denote by APL(L,K)=f(L,K)/L the so-called…

A: The production function is given as;

Q: Whenever the total factor cost function and the total value of the product function are parallel to…

A: In the market, total cost curve depicts the amount of money used by the firm to make production…

Q: The production function for Q is given as Q = 5K1/2L1/2where K is the amount of capital employed and…

A:

Q: Suppose that hiring a third worker at the campus coffee shop increases sales from $115 per hour to…

A: Answer: The marginal product of labor: marginal product of labor refers to the number of additional…

Q: If the Marginal Rate Technical substitution (MRTS) of labor (L) for capital (K) equal * (0.5), then…

A: The Marginal Rate of technical substitution(MRTS) is the rate at which one input is substituted with…

Q: Show that the quantity of labor(L) and capital(K) that a firm demand decreases with a factor’s…

A: The Cobb-Douglas (CD) production function is a monetary production function with at least two…

Q: The short-run production function for a manufac- turer of wireless earbuds is shown in the table…

A: The average product is the average output produced by using each factor or input of production. It…

Q: Suppose that a firm's only variable input is labor. The firm increases the number of employees from…

A: The labor market of the economy determines the equilibrium wage rate for the workers in the economy.…

Q: What is an isoquant? What is a marginal product? What is the technical rate of substitution? Explain…

A: Utility: The utility is the power or ability of the goods and services that satisfy the consumers…

Q: What is the total cost when the marginal product of labor is 15? What is the total variable cost…

A: The marginal product of labour can be calculated by dividing change in output by change in labor.…

Q: Find the marginal rate of technical substitution for inputs k and 1 of this production function q =…

A: Production function: q = k + l Where q is quantity  k is capital  l is labor ----------------------…

Q: The production function of a competitive firm is described by the equation y = 1/2G1/2 2.x6x. The…

A: y = 2x1126x212 p1 = $3  p2 = $4To find Marginal Product of good 1 (MP1) differentiate y with…

Q: Which of the following determines the firm's demand curve for labor? a.The size of the labor force…

A: At the point when the marginal revenue result of work is diagramed, it addresses the association's…

Q: A significant property of the Cobb- Douglas production function is that the elasticity of…

A: To find : Elasticity of substitution.

Q: Given the production function y= f(x1,x2)=x11/3x21/3. The amount of  x2 is equal to 216 in the short…

A: Given,  y= f(x1,x2)=x11/3x21/3 Amount of  x2 = 216

Q: Given the production function Y=(lp +kp)1/p, what is the technical rate of substitution, the…

A: A production function is a mathematical and occasionally graphical method of calculating production…

Q: Suppose that the production function takes on the following form: Q = E$K} || If Capital is equal to…

A: Given information Production function Q=E1/3K1/3 E is labor  K is capital Capital is given = 64…

Q: When the marginal product of labor is increasing marginal cost is decreasing constant increasing at…

A: The marginal cost is the cost of producing an additional one unit of output. Marginal products of…

Q: Show that a firm's marginal product of labor MP(E) intersects the maximum point of its average…

A:

Q: Find the supply function as well as the unconditional factor demand functions fo capital and labor…

A: We are going to use profit maximization method to find supply function and unconditional demand for…

Q: Answer the following questions clearly in computer-typed print with Make sure you label your graphs…

A: The isoquant reflects the different consumption combination of two inputs (L and K) that a firm can…

Q: What is the optimal combination of Capital and Labor under the goal of cost minimization in the long…

A: A basic theory used by an individual like producers in order to determine what mix of labor and…

Q: Does additional input of labor entail a steady increase in the output of a firm? Why or Why not?

A: "Factors of production are resources that are used to produce goods or services." There are various…

Q: Which of the following statements is true with regards to the law of diminishing marginal returns…

A: The labor market in the economy determines the equilibrium wage rate and equilibrium employment…

Q: When the input price is constant, the slope of the total factor cost function will also be constant.…

A: When the input price is constant, the slope of the total factor cost function will also be constant.…

Q: Item 9 The following graph shows the marginal and average product curves for labor, the firm's only…

A: When L = 60, TVC = 2,000 x 60 = 120,000 AVC = TVC / Q = 120,000 / 3,600 = $33.33

Q: Given the following Constant Elasticity of Substitution production function, show whether or not it…

A: The CES production function has constant elasticity of substitution. It is developed by the Arrow,…

Q: A T-shirt screener can screen t-shirts (q) in two different ways. He can either use a fast screening…

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

Q: c) Give a formal definition of increasing, decreasing, and constant returns to sale, and determine…

A: Increasing Returns to Scale Increasing our inputs by m increases our output by more than m. Constant…

Q: You are the owner of a puppet manufacturing company. Suppose that labour is the only variable input…

A: When labor is the only variable factor used in the production process then the marginal cost of…

Q: Why does the learning curve apply mainly to direct rather than indirect labor?

A: The learning curve implies that labor becomes more efficient after working for several years. This…

Q: Does the MRTS of the production functions Q=L,K decrease? In this case, does the marginal product of…

A: Answer -

Q: Jackson employs labor (L) and capital (K) to produce his output. The marginal product of labor MPL…

A: A firm minimizes the production cost at the following point. i.e., (MPL / PL) = (MPK / PK)…

Q: A firm has a production function given by Q= ALα Kβ and per unit price of capital (K) and Labour…

A: The production function of the firm is, Q = A(L^?)*(K^ꞵ)   The marginal product (MPL) of labor is,…

Q: Assuming the firm is minimizing its cost and the price of labour is $10 per unit and the price of…

A: In economics, the marginal product of labor is the change in output that results from employing an…

Q: A firm has a production function given by Q AL" K# and per unit prices of capital (K) and labour (L)…

A: given, Production function Q = ALαKβ                           Wages = w…

Q: Describe the difference between a diminishing marginal product of labor and a negative marginal…

A: Law of diminishing marginal product is a short run concept where some factors are fixed and some are…

Q: Using the production function q = (z1ª + z2ª)-/a for a manufacturing firm, where zį denotes labor,…

A: Given Production function Given production function Q=(Z1α+Z2α)1/α Z1=labor Z2=Capital α=constant…

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.