Chapter 6, Problem 1RQ

A

To determine

To ascertain:The production function for an I wheat farm as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

The production function for an I wheat farm could be described as follows:

  $q=f(K,L)$

Where K stands for capital and L stands for labour.

Output is the wheat and the input is the capital.

Explanation of Solution

The production fuction for a wheat farm is supposed to be a two input function with labor and capital, that is, the production in the wheat farm depends on these two functions, K and L.

  $q=f(K,L)$

The output for the firm would be the wheat produced and the input used would be capital used for purchase of equipment. The production takes place by utilizing only two inputs.

Economics Concept Introduction

Introduction:The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output.

B

To determine

To ascertain:The production function for a vegetable farm as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

The production function for an A vegetable farm could be described as follows:

  $q=f(K,L)$

Where K stands for capital and L stands for labour.

Output is the vegetables produced and the input is the capital.

Explanation of Solution

The production function for a vegetable farm is supposed to be a two input function with labor and capital, that is, the production in the vegetable farm depends on these two functions, K and L.

  $q=f(K,L)$

The output for the firm would be the vegetable produced and the input used would be capital used for purchase of equipment. The production takes place by utilizing only two inputs.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output.

C

To determine

To ascertain:The production function for U steel corporation as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For U steel corporation a variable production function would be used.

The output will be the steel goods and the input used would be capital used for purchase of equipment or acquiring labor, raw materials etc.

Explanation of Solution

The production function of U steel corporation would be a variable production function because with the increase with the increase in number of machineries acquired with the capital the need for labor will reduce proportionately. The output produced would be steel goods and the inputs required for the production will be capital used for purchase of equipment or acquiring labor, raw materials etc.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output.

D

To determine

To ascertain:The production function for local arc wielding firm as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

Fixed production function will be used for a local arc wielding firm. The output will be arc wielding services and the inputs will be capital used for purchase of equipment and labor

Explanation of Solution

Arc welding company − Since considering the inputs are capital and labor will be providing sustainability only to a small extent. Hence, fixed proportion function will be used for this kind of firm.

The output that the firm will produce are the arc wielding services and the inputs used will be capital for acquiring machinery and labor services.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

E

To determine

To Ascertain:The production function for S as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For S variable production function will be used. The output will be will be several variety of goods that are produced and the inputs will be capital used for purchase of equipment and labor

Explanation of Solution

S − Variable production function will be used in this case, as the increase in capital employed will be used to acquire machinery for processing purpose thereby minimizing the stress on acquiring labor. The output will be will be several variety of goods that are produced and the inputs will be capital used for purchase of equipment and labor

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

F

To determine

To Ascertain:The production function for J’s hot dog stand as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For J’s hot dog stand a fixed production would be used. The output will be the hot dogs and the inputs used will be labor and capital simultaneously.

Explanation of Solution

Hot Dog Stand − Since the services of labor is replaceable to a particular degree with the use of capital, the fixed proportion function can be used. While the output will be hot dogs, the inputs will be labor and capital.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

G

To determine

To Ascertain:The production function for M opera as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For M opera a fixed production function will be used. The output will be the opera performances and the inputs will be the performers, the opera house, capital etc.

Explanation of Solution

Opera Company − Since the inputs like labor are not substitutable, the fixed production function can be implemented. While the output is opera house performances, the inputs are performers, house, and capital and so on.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

H

To determine

To Ascertain:The production function for M museum of art as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For M museum of art a variable production function shall be used. The output produced will be the art collection display and the input will be capital.

Explanation of Solution

Museum of Art − For this particular case, the variable production function can be used, as the input of capital will minimize the employing of other factors. The inputs will be capital in the form of building, employment, equipment etc. while on the other hand the output will be art display.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

I

To determine

To Ascertain:The production function for National Institute of Health as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For National Institute of Health, fixed proportions production function will be used. The inputs utilized will be staff services and the output will be health services

Explanation of Solution

Health Institute − Since the inputs used in this institute are not substitutable in varying proportions, for this the fixed proportion function will be used. While the output will be health services, the inputs will be services such as staff and capital.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

J

To determine

To ascertain:The production function for Dr. S’s private practice as well as its output and inputs. Any special way the production takes place need to be described as well.

Answer to Problem 1RQ

For private practice a fixed proportion production function will be used. The output will be medical services while the inputs will be capital

Explanation of Solution

Private Practice − Here also the fixed proportion function will be used, the output will be medical services, and finally the input will be capital and materials and such other.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output

K

To determine

To ascertain:The production function for P’s lemonade stand as well as its output and inputs. Any special way the production takes place need to be described as well

Answer to Problem 1RQ

For P’s lemonade stand a fixed production function will be used. The output will be lemonade and the input will be capital

Explanation of Solution

Lemonade Stand − In this scenario, the input of labor will be substitutable with capital. Therefore, a fixed production function will be used. The output will be lemonade and the inputs will be labor, capital and raw materials and so on.

Economics Concept Introduction

Introduction:

The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output