CES (Constant Elasticity of Substitution) production function is given as; Q = A[8K P+(1-8)L-P]-¹/P (A > 0; 0 <8 < 1; -1 < p = 0) a) Find the Marginal Productivity of Capital (MPK) b) Find the Marginal Productivity of Labor (MPL) c) Find the Marginal Rate of Technical Substitution (MRTS) d) Find the Elasticity of Substitution
Q: EXERCISE 179.1 (Subgame perfect equilibria of ticktacktoe) Ticktacktoe has sub- game perfect…
A: A subgame perfect equilibrium is a solution concept in game theory that represents a strategy for…
Q: Expansionary monetary policy may prevent deep recessions with uncertain long-term consequences.…
A: Expansionary monetary policy: When a central bank raises money supply through an open market…
Q: Consider an input-output model with 3 sectors. Sector 1 is heavy industry, sector 2 is light…
A: The Leontief model is a macroeconomic model that applies to a country or region as a whole.…
Q: 100 1 Price 882 90 80 70 60 55-- 50 40 30+ 8 20 10 MC 5 10 15 20 25 30 35 40 Quantity Price…
A: Incase of a monopoly , A single price monopolist will produce where the MR = MC A perfectly price…
Q: when it comes to the application of how the federal budget deficit affects economic variables, what…
A: Budget deficit occurs when the government expenditure is more than the government revenues. To…
Q: Two local Madison car dealerships, Badger Cars Inc. and Dane Cars Inc., are competing and both are…
A: In game theory, the Nash equilibrium is a concept that refers to a stable state of a game in which…
Q: Use the supply and demand analysis of the market for reserves to visually illustrate and explain how…
A: Introduction The demand and supply analysis focuses on the demand for a product or service and…
Q: Suppose the daily market demand for meat in a small town is given by 7 QD = 5p² where Qp is the…
A: Quantity demanded is referred to as the total amount of goods and services that are demanded by…
Q: ivate marginal cost and MB represents private marginal benefit. ssume there are two types of firms…
A: In the presence of a positive externality, allocative efficiency occurs at the following point. MC =…
Q: ABC Company in New York is financially distressed. It needs the revenue generated by a huge volume…
A: Buyers: A buyer's market is a market for a particular product or service in which buyers enjoy…
Q: David and Rose both work as artists. David can produce 3 small sculptures each day or 18 paintings.…
A: Opportunity cost: The value of alternative opportunities foregone and sacrificed to acquire one unit…
Q: Are the following statements true or false? Explain a. If the government prices public transport so…
A: A break-even point is a point wherein there will be no profit or loss. In other words, it can also…
Q: Examine the table below which contains some labour market data for the Bahamas (2009 - 2014) and…
A: The minimal amount of compensation that an employer is compelled to pay wage earners for the job…
Q: Price $24 16 10 Tax X D 70 100 S Quantity Refer to Figure 8-4. What is the amount of deadweight loss…
A: The cost that society bears due to market inefficiencies is deadweight loss. The taxes can create…
Q: C. Market for Electric Fans In the long-run equilibrium of a competitive market, the market supply…
A: Disclaimer: - Since you asked multipart questions, we are solving first 3 subparts as per…
Q: Construction equipment has a cost today of $40,000. If its cost has increased by only the inflation…
A: Provided information: A construction equipment costs $40000 in the present period => Present cost…
Q: 6.11 Explain why there can never be a No-Show Paradox in an election using the following voting…
A: Voting is a political act that has been described in a variety of ways. According to a sociological…
Q: QUESTION 1 The satisfaction or pleasure one gets from consuming a good or service is called…
A: Utility is a theory in economics that attempts to quantify in monetary terms the worth, pleasure, or…
Q: Currently, 10,000 people take city buses each day and pay 2 dollars for a ticket. The number of…
A: Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…
Q: The purpose of the Social Security retirement program is to a. increase retirement income to 75…
A: Economic benefits are advantageous that can be quantified in terms of money generated, like net…
Q: According to the chapter 1 of Healey's book, economics and the movement of jobs and opportunity from…
A: The easiness with which workers can shift around between and within economies is known to as labour…
Q: are n bidders. Bidder i values the first unit that she obtains at v; and the second unit at w¡,…
A: An auction is a market mechanism in which goods or assets are sold to the highest bidder. Auctions…
Q: Consider a perfectly competitive market where the market demand and supply are given by QD=550-50P…
A: introduction Demand-supply analysis helps in finding out the equilibrium market price and quantity…
Q: B 2 Consider a pool of potential consumers of insurance with a known probability of sickness,…
A: Insurance is a form of economic protection against the risk that can only exist in a world of…
Q: Burritos is a normal good if the demand a. b. C. d. for burritos rises when income rises. B for…
A: Demand is the requirement of the products or services as raised by the consumer, A higher…
Q: List one assumption of each market stru Perfectly competitive market, Monopoly Oligopoly…
A: Market structure is a method for characterizing and comprehend organizations in light of the level…
Q: How do statisticians and economists measure GDP? Specifically, what is the formula used? Define the…
A: Gross domestic product (GDP) refers to a measure of the market value of all goods and services…
Q: Kate quit her job, where she earned $120,000 per year, to start her own financial consulting firm.…
A: In economics, profit is the difference between the revenue that an economic entity has received from…
Q: Suppose the demand curve for cars in former Czechoslovakia was characterized by the equation QD =…
A: Demand function QD = 2000 − 40P Supply function QS = 20P − 400
Q: C. Market for Electric Fans In the long-run equilibrium of a competitive market, the market supply…
A: Given , Market Long Run Supply : P = 30 + 0.5Q Market Long Run Demand : P = 100 - 1.5 Q MC of…
Q: How can the poverty Rate of Developing Nations be reduced?
A: Poverty refers to a situation where an individual or a family lacks the affordability to meet the…
Q: In the United States, imports of raw sugar are limited to about three billion pounds. The price of…
A: Trade restrictions refers to the policy adopted by the domestic government to control by prices of…
Q: F. Market for Cable Television The City of St. Francisville is considering a proposal to award an…
A: As given P = 28 - 0.0008Q MR = 28 - 0.0016Q TC = 120000 + 0.00062Q2 MC = 0.0012Q
Q: EXERCISE 74.1 (Electoral competition with three candidates) Consider a variant of Hotelling's model…
A: A Nash equilibrium in game theory is a collection of player strategies where no player has an…
Q: Suppose jumbo packs of notepads are sold in a perfectly competitive market for 60. To produce jumbo…
A: A perfectly competitive firm is a part of the market that includes a huge count of traders and…
Q: What is the wholesale cost of an item, if the retail cost is $62 and the amount of markup is $17?…
A: The wholesale cost of an item can be defined as the cost that is charged to those to whom the goods…
Q: 10. According to the following table, if the US trades 8 bushels of wheat to the UK for 8 yards of…
A: While determining which country will produce which good, one has to compare the cost of the…
Q: Consider the following graph of a monopolistically competitive firm: 50 45 40 35 ↑ Price 20 15- 10-…
A: In a monopolistic competition , A firm will produce where MR = MC A perfectly competitive firm…
Q: 3. Player A and Player B can either play up, middle, or down in a simultaneous move game. The payoff…
A: In sequential game where player A has to play first, player 2 can see what player 1 is playing and…
Q: Plants A and B emit 12 tons and 6 tons of carbon dioxide (CO2), respectively. MAC(marginal…
A: Given that; There are two Plants A and B A emits 12 tons of carbon dioxide B emits 6 tons of carbon…
Q: If the supply decreases and the demand decreases, the equilibrium price and quantity both decreases.…
A: The supply and demand relationship is the correlation between the quantity sold by a producer and…
Q: Two coal-burning electric power plants are emitting mercury which impairs cognitive development in…
A: When businesses are obliged to eliminate and/or reduce unwelcome annoyances or harmful byproducts…
Q: 3. Suppose that the total revenue function for a commod- ity is R = 64x- 0.02x². (a) Find R(100) and…
A: The additional revenue which the firm earn by selling an additional units of goods is known as MR(…
Q: In free trade, the world price of goods directly imported by China is 400 US dollars; the price of…
A:
Q: Refer to Figure 1. When the price of the good is $12, the firm's maximum profit is $0. a. b. C. d.…
A: For profit maximisation, profit = Total Revenue- Total cost profit = P x Q - total cost…
Q: How can the poverty Rate of Development Nations be reduced? Write in four or more paragraphs
A: When a person is not able to fulfill his basic needs , he will be said poor .For example-Persons not…
Q: i ff1 4) Using supply and demand for reserves, show the effect of decrease in reserve requirements…
A: Banks has to hold a certain amount of liquidity assets in reserve to meet its liabilities ,it is…
Q: Problem. 6: Gator Office Supplies sells two models of fax machines. The wholesale cost of the Blue…
A: Profit is the term used to describe the monetary gain experienced when the revenue from an economic…
Q: Refer to Figure 3. Assume a monopolistic competitive environment: From the 4 graphs depicted, which…
A: monopolistically competitive market: A monopolisticallyy competitive market is a market formation…
![CES (Constant Elasticity of Substitution) production function is given as;
Q = A[8K P + (1-8)L-P]-¹/P
(A>0; 0 <8 < 1; −1 < p = 0)
a) Find the Marginal Productivity of Capital (MPK)
b) Find the Marginal Productivity of Labor (MPL)
c) Find the Marginal Rate of Technical Substitution (MRTS)
d) Find the Elasticity of Substitution](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40cbfefb-6277-47b5-935e-deb45dd78cd3%2F892987ef-15e5-49fc-afa9-ddbc621f032b%2Flj16r2r_processed.jpeg&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 6 steps
- Q5 A firm's production function is Q is equal to 5L2Ka) Find out the MPL and MPb) Does this production function exhibit constant, increasing, or decreasingreturns to scale?c) What is the marginal rate of technical substitution of L for K for thisproduction function Q6.Suppose the firm sells its output according to the following demand scheduleMarginalTotal Product Total Revenue eLabor Product Price Revenue Product$3.50192c2.80182.30291.80391.65471.5021.4053Fill in the remaining two columns of the table. How many workers wilhired at a wage of $72Problem 5 The production function of COVID vaccines for firm O is given by v° = VKL. and requires at least one unit of labor L and one unit of capital K, i.e. L>1 und K > 1. a) After a year and some thorough research, the production function changes to VO = V4KL. (I) Compute the marginal products with respect to labor L and capital K for both production functions ! (II) Which company's the marginal products is/are larger ? What happened to the original level of production after a year ? (III) Do the production functions exhibit increasing, constant or decreasing returns to scale ? b) Suppose now, we compare production functions of company O that discovered the vaccine to a second company M. The production function of M is given by VM = K0.6 L0.4 (I) Compute the marginal products with respect to labor L and capital K for this pro- duction function ! (II) If both companies used the same equal amount of labor L and capital K, which of them will generate more output ? (III) If the…The production function for good X in the table below exhibits increasing marginal returns to capital over what outout range? Production Function for Good X Choose Multiple Choice: Between o and 1,524 Between 2,391 and 3,048 Between o and 2,991 Between 3,016 and 2,945 L* K MPx=(AQ/AK) AP=(Q/K) Marginal Product of Capital Average Product of Capital Labor Capital Output 10 57 5.7 5.70 20 324 26.7 16. 20 30 657 33.3 40 1,072 41.5 26.80 se 1,524 45.2 30.48 60 1,976 45.2 32.93 70 2,391 41.5 34.16 se 2,724 33.3 34.05 9e 2,991 A 33.23 1ee 3,848 5.7 30.48 9. 11e 3,016 -3.2 27.42 120 2,945 -7.1 24.54
- If a firm has the production function f(k, I) = (2k1/4 + 14)" what is the firm's elasticity of substitution? O a. G = O b. o = O c. o = 1 O d. a = 2 O e. o = 4 114 -/21. Suppose that a producer has the following production function: -1/3 Where Q is output, and L and K are man-hours and machine-hour the two inputs used in the production process. IB) (8 Points) Detemine the cost-minimize ratio of inputs where capital costs $1 per machine hour and labor costs $4 per lab-hour.1. Suppose that a producer has the following production function: Q = K³L6 Where Q is output, and L and K are man-hours and machine-hour the two inputs used in the production process. 1A) Set up the cost minimization problem 1B) Determine the cost-minimize ratio of inputs where capital costs $1 per machine-hour and labor costs $4 per lab- hour. 1C) How many worker-hours are used to produce 100 units of output at these prices? ID) What is the marginal cost of producing another unit of output at this output?
- 2. A firm with the production function f(x) = x₁x₂ wants to produce 100 units of output. a. How much of each input should the firm use if each unit of input costs $1? b. How much of each input should the firm use if w₁ = $1 and w₂ = $4? c. How much of each input will the firm need if it wants to produce 225 units of output and the price of each input is $1? d. Can you tell what kind of returns to scale this production function has from the input demands for each quantity of output?1. Let y = f(x1, x2)=x11/2+ X1X2 be a firm's production function, where x20, x220. - a. Write down the firm's production possibility set, and its input requirement set.“ b. Is this production function concave, quasi-concave? c. Is this production function homogenous, homothetic? + d. Find its returns to scale when x1=1, and x2=1.eA manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $7 per hour and capital is rented at $11 per hour. If the marginal product of labor is 65 units of output per hour and the marginal product of capital is 55 units of output per hour, should the firm increase, decrease, or leave unchanged the amount of capital used in its production process? O The firm should leave capital unchanged. O The firm should increase capital. O The firm should decrease capital.
- 5. The production function is given by y=x₁ + 2x2. If w₁ = 10, w₂ = 8, will the firm use input factor 2 to minimize the cost? In what case will the firm use input factor 2?1. Figure 1 shows the production function of a firm. Y В Y2 Y1 X X1 X2 a) What are the variables along (i) of the X axis? (ii) Y axis? b) Does the firm operate in the short term or long term? c) Referring to the diagram above, what is the level of input where (i) firms experiencing increased marginal output? (i) does the firm experience a declining marginal output? (i) the firm achieves maximum marginal output? (iv) the firm achieves a blank marginal output?Consider a firm that produces output using industrial robots and skilled labor. Suppose it is the case that a reduction in the price of industrial robots causes the firm's labor demand curve for skilled workers to increase (i.e., to shift to the right). This implies that: There is diminishing marginal product of robots. O There is diminishing marginal product of skilled labor. O Robots and skilled labor are complements. O Robots and skilled labor are substitutes. The unit cost of skilled labor is below the unit cost of robots.