Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 17.A, Problem 8QE
(a)
To determine
Determine the proposal that would be adopted.
(b)
To determine
Determine the choice of the firm if the price of labor increases.
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Students have asked these similar questions
Q87
Consider a firm that uses only labour and capital as inputs. At the present use of labour and capital, the MP of labour is four times the MP of capital and the price of labour is twice the price of capital. To minimise its costs for a given level of output, the firm should...
a.
Decrease both capital and labour.
b.
Increase both labour and capital.
c.
Decrease capital and increase labour.
d.
Stay at its present factor mix.
e.
Decrease labour and increase capital.
Con Co. produces a collectible card game. Currently, the price of capital is at $50 and the price of labor is at $10. The marginal product of capital is 200 and the marginal product of labor is 30. To minimize cost of the given output, Con Co. should
Use more capital
Use more capital and labor
Leave capital and labor as is
Use more labor
Which of the following statements are true?
A basic assumption of the theory of production is that:
A firm cannot borrow money to finance its input expenditures.
A firm can buy as much labor and capital as it desires in the long-run
A firm can reduce the number of workers it uses, but it cannot adjust how much capital it uses in the short-run
When the marginal product of labour starts falling, the firm must cease production
a. II only
b. II and III
c. I, III and IV
d. II, III and IV
Chapter 17 Solutions
Microeconomics
Ch. 17.1 - Prob. 1QCh. 17.1 - Prob. 2QCh. 17.1 - Prob. 3QCh. 17.1 - Prob. 4QCh. 17.1 - Prob. 5QCh. 17.1 - Prob. 6QCh. 17.1 - Prob. 7QCh. 17.1 - Prob. 8QCh. 17.1 - Prob. 9QCh. 17.1 - Prob. 10Q
Ch. 17.A - Prob. 1QECh. 17.A - Prob. 2QECh. 17.A - Prob. 3QECh. 17.A - Prob. 4QECh. 17.A - Prob. 5QECh. 17.A - Prob. 6QECh. 17.A - Prob. 7QECh. 17.A - Prob. 8QECh. 17.W - Prob. 1QECh. 17.W - Prob. 2QECh. 17.W - Prob. 3QECh. 17.W - Prob. 4QECh. 17.W - Prob. 5QECh. 17.W - Prob. 6QECh. 17.W - Prob. 7QECh. 17.W - Prob. 8QECh. 17.W - Prob. 9QECh. 17.W - Prob. 10QECh. 17.W - Prob. 1QAPCh. 17.W - Prob. 2QAPCh. 17.W - Prob. 3QAPCh. 17.W - Prob. 4QAPCh. 17.W - Prob. 5QAPCh. 17.W - Prob. 1IPCh. 17.W - Prob. 2IPCh. 17.W - Prob. 3IPCh. 17.W - Prob. 4IPCh. 17.W1 - Prob. 1QCh. 17.W1 - Prob. 2QCh. 17.W1 - Prob. 3QCh. 17.W1 - Prob. 4QCh. 17.W1 - Prob. 5QCh. 17.W1 - Prob. 6QCh. 17.W1 - Prob. 7QCh. 17.W1 - Prob. 8QCh. 17.W1 - Prob. 9QCh. 17.W1 - Prob. 10QCh. 17 - Prob. 1QECh. 17 - Prob. 2QECh. 17 - Prob. 3QECh. 17 - Prob. 4QECh. 17 - Prob. 5QECh. 17 - Prob. 6QECh. 17 - Prob. 7QECh. 17 - Prob. 8QECh. 17 - Prob. 9QECh. 17 - Prob. 10QECh. 17 - Prob. 11QECh. 17 - Prob. 12QECh. 17 - Prob. 13QECh. 17 - Prob. 14QECh. 17 - Prob. 15QECh. 17 - Prob. 16QECh. 17 - Prob. 17QECh. 17 - Prob. 18QECh. 17 - Prob. 19QECh. 17 - Prob. 20QECh. 17 - Prob. 21QECh. 17 - Prob. 22QECh. 17 - Prob. 23QECh. 17 - Prob. 24QECh. 17 - Prob. 25QECh. 17 - Prob. 26QECh. 17 - Prob. 1QAPCh. 17 - Prob. 2QAPCh. 17 - Prob. 3QAPCh. 17 - Prob. 4QAPCh. 17 - Prob. 5QAPCh. 17 - Prob. 6QAPCh. 17 - Prob. 1IPCh. 17 - Prob. 2IPCh. 17 - Prob. 3IPCh. 17 - Prob. 4IPCh. 17 - Prob. 5IPCh. 17 - Prob. 6IPCh. 17 - Prob. 7IPCh. 17 - Prob. 8IPCh. 17 - Prob. 9IPCh. 17 - Prob. 10IPCh. 17 - Prob. 11IP
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Similar questions
- Consider a firm that has production function f(L,K)= 3L2/3K1/3. What is the expression for this firm’s Marginal Product of capital? MPK(L,K)= 3L2/3/K1/3. MPK(L,K)= 3L2/3/K2/3. MPK(L,K)= L1/3/K1/3. MPK(L,K)= L2/3/K2/3. MPK(L,K)= 2L2/3/K1/3.arrow_forwardThe marginal product of an input in the production process is the increase in 1. profit obtained from an additional unit of that input. 2. total revenue obtained from an additional unit of that input. 3. total revenue obtained from an additional unit of that input. 4. quantity of output obtained from an additional unit of that input.arrow_forwardA firm requires labor and capital to produce a given output. Labor costs $8 per hour and capital costs $12 per hour. At the current level of output, the marginal product of labor is 48 and the marginal product of capital is 60. To minimize production costs, in which way should the firm allocate its resources?arrow_forward
- Suppose a firm is using 1500 units of labour and 20 units of capital to produce 100 tonnes of mineral ore. The price of labour is $50 per unit and the price of capital is $800 per unit. The MPL equals 60 and the MPK equals 1200. In this situation, A. the firm is minimizing its costs. B. the firm should increase the use of both inputs. C. the firm could lower its production costs by decreasing labour input and increasing capital input. D. the firm could lower its production costs by increasing labour input and decreasing capital input. E. the firm should decrease the use of both inputs.arrow_forwardSuppose that an economy produces 3,000 units of output, employing 60 units of inputs, and the price of the input is $30 per unit. The per-unit cost of production is A) $0.6 B) $0.30 C) $0.10 D)$ 1.00arrow_forwardSuppose the long-run production function for a competitive firm is f(L,K)= L 1/3 K 1/4 , where L is the amount of labor and K is the amount of capital. The cost per unit of labor is w and the cost of capital is r, which is the interest rate. Fixed costs are zero. .a. Find the cheapest input bundle, i.e. amount of labor and capital, that yields the given output level of y. .b. Draw the conditional input demand functions for labor and capital in the L-y and K-y spaces. .c. Write down the formula and draw the graph of the firm’s total cost function as a function of y, using the conditional input demand functions. What is the relationship between the returns to production scale and the behavior of the total costs? .d. Write down the formula and draw the graph of the average cost and marginal cost functions, as functions of y.arrow_forward
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