A firm produces output using two factors of production, Ask an Expert

Economics

A firm produces output using two factors of production according to technology f(x1, x2) = X1^1/2*X2^1/4. The price of output is 4. Factors 1 and 2 cost to the firm w1 and w2 per unit, respectively.

(i) Write an expression for the firm’s profit.

(ii) Write an equation having on the left hand side the marginal product of input 1 times the price of output and on the right hand side its wage (w1). Do the same for input 2.

(iii) Solve the two equations you found in (ii) in the two unknowns, x1 and x2. (This will give the amounts of factors 1 and 2 that maximize the firm’s profits.)

(iv) If w1 = 2 and w2 = 1, how many units of factors 1 and 2 will the firm demand? How much output will it produce? How much profit will it make?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M91855515

Have any Question?Write your Review or question?

Related Questions in Business Economics

Economics - unemploymentwhat kind of monetary and fiscal

Economics - Unemployment What kind of monetary and fiscal policies could be introduced to reduce unemployment? Why would we expect these policies to have inflationary consequences? Illustrate your answer diagrammatically

Research on the web ideas for small businesses for students

Research on the web ideas for small businesses for students. Describe at least three different ideas and include what for of business ownership you would use to structure each business.

The following chi-square example of three age groups for

The following chi-square example of three age groups for men and women.: Age Group 0-18 19-35 Over 35 Men 18 30 12 Women 12 20 ...

A professional baseball pitcher takesnbsp1566nbspseconds to

A professional baseball pitcher takes 15.66 seconds to throw each? pitch, on average. Assume the? pitcher's times per pitch follow the normal probability distribution with a standard deviation of 2.6 seconds. Complete pa ...

Question onethe following is the number of first year

QUESTION ONE The following is the number of first year students who selected the three mathematics units for trimester one; Unit Number of students Calculus only 20 Calculus but not Statistics 22 Calculus and Real analys ...

How the manager use the information supposed the

How the Manager use the information "supposed the macroeconomic forecast predict that the economy will be expanding in the near future" in an organization?

Complete parts a and b using the probability distribution

Complete parts (a) and (b) using the probability distribution below. The number of overtime hours worked in one week per employee Overtime hours 0 1 2 3 4 5 6 Probability 0.016 0.063 0.178 0.283 0.220 0.173 0.067 Find t ...

In a random sample of 100 college student 60 were females

In a random sample of 100 college student 60 were females, 65 were under 21 years of age and 15 males were 21 years of age or older, a student is selected at random from the sample. What is the probability that a female ...

Suppose that third national bank has reserves of 20000 and

Suppose that Third National Bank has reserves of $20,000 and check able deposits of $200,000. The reserve ratio is 10 percent. The bank sells $20,000 in securities to the Federal Reserve Bank in its district, receiving a ...

Investors are evaluating two 6-year bonds at time t in a

Investors are evaluating two 6-year bonds at time t in a financial crisis setting where there is a strong likelihood of default. Assume the following values for the probability of default (z) of the two bonds, issued res ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert