Y 12 SA initial MRTS AK 10 8 diminishing MRTS 6 4 2 IQ = 100 1 2 3 4 5 6 7 Labor (L) A) Assume a price for capital and another for labor. Calculate the cost of two points according to the prices you have assigned. B) Find out which point is one with minimum cost. C) Draw the budget line going through the point you have found in part C. B. i.... Capital (K)

Y 12 SA initial MRTS AK 10 8 diminishing MRTS 6 4 2 IQ = 100 1 2 3 4 5 6 7 Labor (L) A) Assume a price for capital and another for labor. Calculate the cost of two points according to the prices you have assigned. B) Find out which point is one with minimum cost. C) Draw the budget line going through the point you have found in part C. B. i.... Capital (K)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

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Similar questions

True or false The law of diminishing returns implies that the marginal product of labor (MPL) is increasing as labor input increases.
Starting from an initial optimal level of employment and output with well-behaved isoquants. Draw the effect of a decline in the price of labor (horizontal axis), where the substitution effect on capital is larger than the scale effect. Clearly highlight the expansion path in this case and label whats neccessary.
The marginal rate of technical substitution of labor for capital (MRTSLK) is defined as the rate at which the quantity of ______.A. capital can be increased for every one unit increase in the quantity of laborB. capital can be increased if the quantity of labor remains the sameC. labor can be reduced as capital costs increaseD. capital can be reduced for every one unit increase in the quantity of labor
Differentiate between the Iso quant and Iso cost. If Iso quant is represented by Y = L0.5K0.5. and wage rate w = 10, rent of capital r = 5 and total budget M = 300, then find out the optimum combination of inputs and the output produced by these inputs.
A firm employs M workers per week and the length of the workweek at the firm is H Let MPM be the added output from an additional employee and let MPH be the added output from a one hour increase in the workweek at the firm. MEM and MEH are, respectively, the marginal expense of an added worker and of an added hour of work. At present, the cost of an added unit of output produced by hiring more workers is $5 while the cost of an added unit of output produced by employing existing workers for more hours is $3. Is the firm maximizing profits given its current employment level and workweek? If your answer is yes, explain why. If your answer is no, explain why not and discuss what adjustments the firm should make. It's a general question. There's no given output being produced by added workers and additional hours.
Refer to the provided graph showing the marginal product (MPL) and the average product of labor (APL). At which quantity of labor employed is total product maximized? Multiple Choice A B C D
From the following production functions 1. Q= a1H + a2L + a3H2 + a4 L2 + a5HL, where ai> 0 2. Q = aH@ Ly, where a, @, y > 0 a. Derive the equation of the relevant isoquant. b. Find out whether the production function is well behaved. c. Examine whether the isoquant is well behaved and therefore represents the behaviour of a rational production. d. Derive equation which describes MRTS of 9ne factor. e. For each equation examine whether the production is homogeneous and if so, what is the degree of homogeneity. Is the equation characterized by IRTS, DRTS or CRTS.