d. A major advance in technology occurs that allows farmers to produce a 25-pound gain per lamb with less hay and grain than the preceding table indicates. If the marginal rate of technical substitution (at each rate of consumption of each input) is the same after the technological advance as before, can you draw the new isoquant corresponding to a 25-pound gain per lamb?

Another farmer purchases nitrate and phosphate fertilizers to produce corn, and the more of any one input he uses, the lower the marginal productivity of that input. Suppose the farmer decides to maximize output for a given cost. (That is, imagine a given isocost line.) Suppose the price of nitrate is 36 cents per pound and the price of phosphate is 24 cents per pound. Moreover, suppose the farmer currently chooses an input combination such that the marginal product of a pound of nitrate is 4 bushels of corn and the marginal product of a pound of phosphate is 3 bushels of corn. Should the farmer use the current mix of nitrate and phosphate? Should he use more nitrate and less phosphate? Or, should he use more phosphate and less nitrate? Please carefully draw a diagram with pounds of nitrate plotted along the horizontal axis and pounds of phosphate plotted along the vertical axis to support your conclusion. Moreover, please report the slope of the isocost line. And please report the…

Find the elasticity of scale and the elasticity of substitution for the CES production function: 1 1 f(x₁, x₂) = (x³ + x2)³. Solution: We first calculate the marginal products: 2 fx₁ = 3 + = x1fx1 -+ 2 2 10 - ² ( x² + x ) ( + x^²) = ( + + + + ² ) 15 ²0 x² -2/3 x₂ + x2fxz Elasticity of scale = _1₁_+_*__*(+)´<°¸«d«)*;»_ f(x1, f(x1, ‹2)² = -2/3 r2/3 = TRS = t (where TRS = =t). ⇒ r = t³/² ⇒ ln(r) = ln (t) and o = -2/3 dln (r) dln (t) To get elasticity of substitution, we first need TRS and denote r = 1 x3 X1 TMS - F (+4+2)0 = fx₁ fx₂ 2 1 + x²) x₂² MIN x2 3 -2/3 (x² -2/3 2 2/3 2/3 x1 -2/3 = r²/3 x¹/3 + 1/3 = 1.

What effect might a decrease in the demand for high definition televisions have on the short-run average total costcurve for this product?

Input either "increase" or "decrease" where relevant: A decrease in the price of a complementary good will cause its complement’s equilibrium price to ...... and the equilibrium quantity to .....

4 The prices of inputs x1; x2; x3; x4 are p1 = 2; p2 = 2; p3 = 5; and p4 = 2. If the production function is given by f(x1, x2, x3, x4) = min{x1, x2} + min{x3, x4}, what is the minimum cost of producing one unit of output?.

Kris wants to open a BBQ restaraunt. He has signed a 12- month lease at $6,000 per month. The lease enabled him to rent a restaraunt with all the equipment he needs to make BBQ; therefore, K equals 1. Kris must pay his workers a monthly salary of $2,400 each. His production function is q = 100L1/2K1/2 where q is the quantity of BBQ prepared per month in pounds, L is the number of workers employed per month, and K is the quantity of capital employed, and, as previously indicated, K is assumed to equal 1. What does Kris's monthly total cost expressed as a function of quantity equal?

Given the following data on input and output levels. Suppose the output price is $5 and input price is $10. Find the values of APP and MPP when X = 6: X 0 2 4 6 8 10 12 Y 0 100 250 450 600 700 750 50 and 150 6 and 200 100 and 75 75 and 100

Input either "increase" or "decrease" where relevant: An increase in the prices of inputs will cause the equilibrium price to ....... and the equilibrium quantity to .....

Suppose that the production function for Hannah and Sam's home remodeling business is            Q = F(L,K)            Q = 10L0.1K0.4.Assume the wage rate is $8,000 per week and the cost of renting a unit of capital is $1,000 per week.a. What is the least-cost input combination for remodeling 400 square feet each week?      Instructions: Round your answers to 2 decimal places.      units of labor and  units of capital.  b. What is the total cost?         Instructions: Round your answer to 2 decimal places.    $  .revised jrl 08-11-2011