Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Theory of Production:

problem 1: Suppose a firm’s budget were large enough to employ 100 units of either labor or capital, the cost of a unit of labor being the same as a unit of capital. The production function is X = KL . Given that output must be at least 20, what is the maximum number of people the firm could employ?

problem 2: The production function of a small shop that frames pictures is Q = 5 √LK where Q is the number of pictures framed per day, L is labor hours and K is the machine hours. Suppose 9 labor hours and 9 machine hours, are used every day, what is the maximum number of pictures that can be framed in a day? find out the marginal product of labor when 9 labor hours are used each day together with 9 machine hours. Suppose the firm doubles both the amount of labor and machine hours used per day, find out the increase in output. Comment on the returns to scale in the operation.

problem 3: Suppose you are an efficient expert hired by a manufacturing firm that uses two inputs, labor (L) and capital (K). The firm produces and sells a given output. You have the following information: PL = Rs 4, PK = Rs 100, MPL = Rs 4, MPK = Rs 40.

a) Is the firm operating efficiently? Why or Why not?

b) What should the firm do?
 
problem 4: Suppose that in an isoquant mapping, you should consider three isoquants with 1000, 2000 & 3000 units of output. The price of capital is Rs 2 a unit, and the price of labor is Rs 1 per unit.

a) Construct an expansion path.

b) How many units of each input are used to produce each level of output efficiently?

c) What is the minimum cost of producing each level of output?

d) Answer each problem under the assumption that the price of labor is now Rs 2 a unit and the price of capital is Re 1 a unit.
 
problem 5: The production function of the personal computers for DISK Company is given by Q = 10 √KL where Q is the number of computers produced per day, K s the hours of machine time, and L is hours of labor input. Disk’s competitor, FLOPPY Company is using the production function Q = 10 K.6 L.4 .

a) If both companies use equal amounts of capital and labor, which will generate more output?

b) Assume that capital is 9 machine hours, but labor is unlimited in supply. In which company is the marginal product of labor the greater? describe.
 
Theory of Cost:
 
problem 6: A firm producing hockey sticks has a production function given by X = 2 √KL In the short-run, the firm’s amount of capital equipment is fixed at K = 1000. The rental rate for capital (PK) is PK = v = Re 1.00; and the wage rate for L is PL = w = Rs 4.00.

a) find out the firm’s short-run total cost curve. find out the short-run average cost curve.

b) What is the firms short-run marginal cost function? What are the STC, SATC & SMC for the firm if it produces 25 hockey sticks?
 
problem 7: Assume that input prices are constant at r = 1, w = 1, with technology which consists of 5 processes having the following properties:

25_input prices.jpg

A producer can purchase labor without limit, but can purchase machine-hour only up to a total of 75. find out

a) The producer’s total and average cost of producing 100, 200, 300, 400 and 500 tons.
b) At what output levels will marginal cost change?
c) Give the marginal costs and output ranges over which each level of marginal cost is relevant.
 
problem 8: A firm is employing 100 hours of labor and 50 tons of cement to produce 500 blocks. Labor costs Rs 4 per hour and cement costs Rs 12 per ton. For the quantities employed MPL = 3 and MPC = 2. Show this situation in an isoquant-isocost diagram. describe and show in the diagram, how the firm can produce the same output at a lower total cost.
 
problem 9: If the marginal product of L is MPL = 10K – L and the marginal product of K is MPK = 10L – K, then what is the maximum possible output when the total amount that can be spent on K and L is Rs 1000 and the price of K is Rs 5 and the price of L is Rs 5.

problem 10: Is a firm minimizing its costs, if the marginal product of labor is six, the marginal product of capital is five, the wage rate is Rs 2.00 and the interest on capital is Rs 1.00? If not what must the firm do to minimize its costs?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91189

Have any Question? 


Related Questions in Microeconomics

Task list principles of microeconomicsyou are starting

Task List: : Principles of Microeconomics You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estim ...

Project-listen to this video asafter you work on your graph

Project- Listen to this video as/after you work on your graph. The lecture is on the 'Aftermath of the Financial Crisis' given by Ben Bernanke in March 29 th 2012. https://www.c-span.org/video/?305198-1/ben-bernanke-lect ...

Economics assignmentcontentselect a news article with

Economics Assignment Content: Select a news article with economic implications within the previous six months and explain, analyze and expand the issue using the economic concepts and theory learned in this class. Includ ...

Assignment emerging economies and Assignment: Emerging Economies and Globalization

Assignment: Emerging Economies and Globalization Background Markets in developed economies are approaching saturation level. Therefore, MNCs are searching for new untapped markets in emerging countries such as India and ...

Assignment voluntourism-go to httpwwwvoluntourismorgreview

Assignment: VolunTourism- Go to http://www.voluntourism.org Review the home page to understand the resources available on this web site and to get a feeling for what VolunTourism is.On the menu (left screen) under "Who A ...

Assignment1in your own words please define describe and use

Assignment 1. IN YOUR OWN WORDS, please define, describe and use an example for the following term (see below). The term (including example) should be no more than 50 words.The following rubric is used to assess each ter ...

Question 1consider the market for a course of antibiotics

Question 1. Consider the market for a course of antibiotics. Suppose the supply of antibiotics follows P = 5 + 2Qs and the demand follows P = 20 - 2Q D . Here, Q represents antibiotics, denominated in millions of units. ...

Assignment1laura just opened a coffee shop in nyc named

Assignment 1. Laura just opened a coffee shop in NYC named Squirrel Coffee. Hoping to cater to the hipsters, she sells a special kind of cold brew infused with nitrogen, which she dubs ‘nitro coffee'. Assume for the purp ...

Microeconomicsdiscussion forumnote the video has closed

Microeconomics DISCUSSION Forum Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu. Note: The video has Closed C ...

Assignment land restoration proposalpart 1please see

Assignment: Land Restoration Proposal Part 1 Please see attachment for part 1 and only complete highlighted section for this assignment. Your team has been given the land rights to a 100-acre abandoned parcel of land. Th ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen