Consider a firm with the production function: Q(L,K) = LK Suppose the wage rate, w, is $6 per unit of labor and the rental rate, r, is $24 per unit of capital. A firm wants to produce 100 units of output. A. B. Suppose that in the short run, capital is fixed at 2 units. Find the labor input required to produce 100 units of output and the firm's short run total cost. Now suppose the firm is in the long run. Find the firm's cost-minimizing input combination and the total cost of producing 100 units of output. How do long run costs compare to short run costs? I. II. Given the firm's production function, Q(L,K) = LK, do you expect the firm's long run average cost to increase or decrease with output? Explain your reasoning

Q: The growth rate of the demand for coal in the world is 6 % per year. In what year will the demand be…

A: A technique for estimating how long it will take a variable developing at a steady pace to double is…

Q: Isabella grows pumpkins. Her average variable cost (AVC), average total cost (ATC), and marginal…

A: Perfect competition is a market form with a high number of buyers and a high number of sellers.…

Q: The bank you own has the following balance sheet Reserves Loans Assets OA. You can go to the…

A: The Federal Reserve:It has the responsibility to manage the activities of commercial and financial…

Q: When the Central Bank increases the money supply, interest rates fall and consumers spend more.…

A: The money supply is the total amount of circulation and deposits in an economy at a period of time.…

Q: Given that f(x) = b^x for b > 0, determine the values of b that will make the function f an…

A: This can be described as a concept that shows when an individual, firm, or any entity uses an…

Q: To support its network, Leroy Merlin prefers to build and run its own distribution facilities where…

A: Currency fluctuations refer to shifts in a nation's value in relation to other currencies, which…

Q: 16. The demand for euros in the foreign exchange market equals 8000 - 2000e and the supply of euros…

A: Exchange refers to the value of one currency in terms of the currency of another country. There are…

Q: The Cobb-Douglas production function for a particular product is N(x,y) = 40x0.6.0.4, where x is the…

A: Production function:N (x,y) = 40x0.6y0.4 Wage per labor (w) = $40Rent per capital (r) = $120Budget…

Q: If the firm sells 5 units at a price of $30 each, then the Quantity Cost Fixed Total Average (in…

A: Where the marginal revenue is equal to marginal cost to maximize its profit. Profit is the…

Q: An unregulated natural monopoly bottles Elxir, a unique product with no substitutes. The monopoly's…

A: A monopoly company is a business that holds exclusive authority over manufacturing and distributing…

Q: Figure 4 Forks (thousands) 70 58 46 20 0 A ID B E 44 60 C 190 80 Spoons (thousands)

A: Opportunity cost is value of next best alternative use of resources. In our context, opportunity…

Q: 17) (OUP-U6-Q14) The figure depicts the isocost lines of a firm. Which of the following statements…

A: A production process requires a number of inputs that need to be utilized efficiently to reach the…

Q: 1. Transform the following extensive game into a matrix, including the player, strategies and…

A: There are two players in the game :  Player 1 & Player 2 Strategy Set  of player 1 :  { T , B ,…

Q: The graph below shows the demand and marginal cost curves for the monopolist Mr. Peanut. a. Draw the…

A: The difference in TR that a business makes when it sells one extra unit of its item or service is…

Q: Use the following information to answer questions 1 and 2…

A: Governme­nt spending towards many public benefits. It's the­ full amount a government spends on…

Q: 6. Why the aggregate supply curve slopes upward in the short run In the short run, the quantity of…

A: According to the sticky wage theory, changes in organisation performance or the state of the economy…

Q: 1. You are evaluating two vehicle lease options. The table below contains the details for each…

A: To determine the most economical lease using present worth, we need to calculate the present value…

Q: An investor has preferences represented by a utility function u(c) and initial wealth w > 0.…

A: Utility function : U (c )  =  c0.5Probability of G = pi Probability of B = (1-pi ) G  =  10  , B  =…

Q: Exhibit 9-7 Monopolist (dollars) 10 8 6 0 Quantity earn an hourly profit of $240. MR As shown in…

A: The monopoly market is described as the single market characterized by one buyer and seller. There…

Q: The following graph shows the daily demand curve for bikes in San Diego. Use the green rectangle…

A: Price Elasticity:Price elasticity computes the responsiveness of demand for a item to the change in…

Q: passage. Drag word(s) below to fill in the be economists believed that the economy take place…

A: A subfield of economics known as macroeconomics studies the economy as a whole at the aggregate…

Q: In the following table, match each example to the productivity determinant it represents. Human…

A: Human capital is the economic value of skill set, knowledge and the training that is possessed by an…

Q: According to the Taylor Rule, if inflation rises by 2%, then the targeted interest rate should rise…

A: Inflation rate is a measure of the percentage change in the average price level of goods and…

Q: "Let's see how this applies to your study time. If you have three hours per night to study, you can…

A: Background Overview: "Now, let's consider how this concept pertains to your study schedule. With a…

Q: Consider the polar case where the demand curve is perfectly elastic. Use the line drawing tool to…

A: Demand is the desire to buy a commodity backed up with sufficient purchasing power and willingness…

Q: Under a fixed exchange rate regime, the central bank must act to keep: 01) i 1) i = F*i*

A: In a fixed exchange rate regime, the central bank must act to maintain the balance of supply and…

Q: fer to the diagram to the right which shows the cost and demand curves for a profit−maximizing firm…

A: The perfectly competitive market refers to a market where homogenous products are produced by all…

Q: 2. Understanding excess capacity The following table shows the daily cast data and demand schedule…

A: A monopolistic competitive market is a type of market in which there is only one seller and many…

Q: A farmer has 1 acre of land. If he uses X pounds of fertilizer he can harvest √x tons of wheat. What…

A: The production function establishes a relationship between the input quantity and the overall…

Q: Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Unemployment Rate Inflation rate % % 8.24…

A: Unemployment is the economic state in which individuals who are actively seeking employment are…

Q: An outside lag is Select one: a. the time it takes for real GDP to reach its potential. b. the…

A: Monetary policy is a policy implemented by the central bank of a country (such as the Federal…

Q: The first table describes an economy's labor market in 2014 and the second table describes its…

A: Labor productivity is a measure of how efficiently labor is being used to produce goods and…

Q: One way governments can charge firms for pollution rights is by imposing a per-unit tax on…

A: Negative externalities as the name suggests are the externality or the negative external situation…

Q: A monopolist with demand curve P=40-Q has costs C=0.5Q2 and MC=Q. Calculate the profits if this firm…

A: Demand curve faced by monopoly: P = 40-QCost curve equation: Marginal cost: In a two-part tariff…

Q: Refer to the table below. Note that the first column shows variable costs. Quantity Cost 0 1 2 3 5 6…

A: The firm will produce where the marginal revenue is equal to marginal cost to maximize its profit.…

Q: Discuss in detail the law of diminishing returns and how it explains the shape of the short-run…

A: The law of diminishing marginal utility (MU) describes, how there can be a maximum utility for the…

Q: The marginal propensity to consume in this economy is [ Suppose the central bank's policy is to…

A: Gross Domestic product is the total value of all goods and services produced within a country's…

Q: Considering the following data: Includes the procedure 2021 INPC   April 103.531 March 103.476…

A: Inflation:It is a situation when prices of goods and services increase and the capacity to purchase…

Q: Use the following table to answer the questions below.      Aggregate Price Level…

A: Aggregate demand : Aggregate demand is a measurement of the total amount of demand for all finished…

Q: A rightward shift of the demand curve in a market with an upward-sloping supply curve will lead to…

A: The equilibrium occurs where the demand and supply are equal. The price prevailing at equilibrium…

Q: Alter the interactive graph in order to witness how a leftward shift of the IS curve affects the…

A: Macroeconomics is a branch of economics that studies the behavior of the economy as a whole,…

Q: Figure: The Home and World Markets The supplied graph shows the case for a tariff imposed by a large…

A: Terms of trade are defined as the index of export prices divided by the index of import prices.…

Q: An industrial juicier costs$45,000. It will be used for five years and then sold to market…

A: Net yearly savings is the amount of money that is obtained after deducting annual expenses from…

Q: the government sets the poverty line at an annual income of $8,000. The percentage of people with…

A: Income inequality is an economic concept which explains the unequal distribution of income among the…

Q: Price P₁ P2 9.00 8.00 Quantity Q₁ Q2 Normal; 0.57 Normal; -0.57 inferior; 0.57 inferior; -0.57 1.000…

A: Income Elasticity of Demand measures the percentage change in the quantity demanded of a good or…

Q: A bank in Mississauga has a buying rate of ¥1 = C$0.01231. If the exchange rate is ¥1 = C$0.01261,…

A: Buying rate of ¥1 = C$0.01231Exchange rate of ¥1 = C$0.01261 The price of one currency expressed in…

Q: Suppose that in the market for sunglasses, market share is divided among six companies in the…

A: The FTC evaluates potential mergers among competitors using the Herfindahl-Hirschman Index (HHI) to…

Q: Given Jon's marginal utility from consuming packets of potato chips in the table below, calculate…

A: Total utility refers to the satisfaction or pleasure a consumer derives from consuming a good. The…

Q: FM and Fp indicate the free time enjoyed by Maaike and Pim, respectively, and G is t hey put into…

A: The welfare of a society depends, upon the satisfaction levels of all its consumers. If there is a…

Q: Refer to the graph of the costs for a perfectly competitive firm. Which of the following best…

A: Perfect competition is a type of market structure in which there are large number of buyers and…

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.