(Answered) Consider a production function for a firmq 2k12l12where q

Economics

Consider a production function for a firm:

Q = 2K1/2L1/2

where Q is output, K is capital, and L is labor. Suppose initially K is equal to 25 units and L is equal to 16 units. You also know that the price of K, Pk, is $10 per unit of K and the price of L, Pl, is $4 per unit of L.

a. Given the above information, what is the value of output?

b. What is the total cost of producing the output you calculated in (a)?

c. What is the average total cost of producing this level of output?

d. Suppose the amount of labor increases to 32 units and the amount of capital increases to 50 units. Given this information, what level of output can the firm now produce? (Hint: you can do this without a calculator - and, then you can check your answer with a calculator!)

e. Given the information in (d), what is the total cost for the firm of producing this level of output?

f. Given the information in (d) and (f), calculate the firm's average total cost of producing this new level of output.

g. Given your answer to the above set of questions, what can you conclude about returns to scale for this firm?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91767681
Price:- $30

Verified Expert

Priced at $60 Now at $30, Verified Solution

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question watch the following video clip cpi a surprise jump

Question: Watch the following video clip, CPI: A surprise jump in inflation to a 2-year-high appears to have reduced the chances of further official interest rate cuts in Australia and answer the following questions. 1. ...

Question consider two goods widgets and gzots which can be

Question: Consider two goods, widgets and gzots, which can be taxed to generate government revenue. The demand elasticity of widgets is 0.5 and of gzots is 1.2. For each good the supply elasticity is infinite (horizontal ...

Question suppose a gym faces inverse demand pqi a - bqi

Question: Suppose a gym faces inverse demand p(qi) = a - bqi from each of N identical customers, and costsrepresented by C(Q) = cQ. Without competition, this would imply that qi = (a- c)/2b , and p = (a+c)/2 . The is one ...

Question suppose you have 5000 in savings when the price

Question: Suppose you have $5,000 in savings when the price level index is at 100. (a) If inflation pushes the price level up by 10 percent, what will be the real value of your savings? (b) What is the real value of your ...

Question the material in this chapter did not focus on

Question: The material in this chapter did not focus on different methods of predicting inflation because the core rate has changed very little since 1982. The biggest change has been 1.1%, and the average change has bee ...

Assignment describe international standard diagnosis

Assignment: Describe international standard diagnosis classification use in the US health care reimbursement and billing system. Utilizing your textbook and the Library: • Describe the importance of proper coding in heal ...

Question in the late 1990s dr chris sarra became the first

Question: In the late 1990s, Dr Chris Sarra became the first Aboriginal principal of Cherbourg State School where he made significant changes to the way that Indigenous students experienced education. Dr Sarra challenged ...

Question economic homework please help1 compare and

Question: Economic homework, please help 1. Compare and contrast classical economics theory and Marxist economic theory in relation to women and their economic capacity or contribution (or lack thereof). Can you write 3 ...

Question the bank of canada defines the canadian money

Question: The Bank of Canada defines the Canadian money supply in terms of Ml+, M1++, M2, M2+, M2++, and M3 monetary aggregates. What financial assets are included in each of these six aggregates? How does each aggregate ...

Question you have been shopping around for a student loan

Question: You have been shopping around for a student loan and you have seen some wide variance between interest rates. You need to borrow $30,000 for 4 years. A loan from your local bank comes with 7% per year interest, ...

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 Microeconomics Expert