Suppose a production function for a firm takes the following algebraic form: Q= 4KL - (0.2)L, where Q is the output of sweaters per day. Now suppose the firm is operating with 12 units of capital (K = 12) and 11 units of labour (L = 11). What is the output of sweaters? O A. 108 sweaters per day B. 467 sweaters per day C. 459 sweaters per day O D. 526 sweaters per day E. 504 sweaters per day

A firm's production function takes the form: Q(L, K) = min{2L, 3K}, where Q represents output and L and K represent labour and capital, respectively and where w and r give the prices of labour and capital. Assuming no other costs, what would be the marginal cost if the firm increased output by 1 unit? O O MC = Q [ 12/2₁ = Q ( + 1/2 + 1/2 ) MC = W 3r 3w+2r 3w+2r + O MC=3w+2r O W r = 21/1/2+1/1/3/2 O MC =2w+3r MC=1/2

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In the short run production function   O a. All inputs are variable  O b. All inputs are fixed   O C. There are fixed and variable inputs  Od. Technology alone is variable

3. The Chipper Cookie Company's output is given by the Cobb-Douglas Production function P = 120L0.7 K0.3, where P is the number of units produced when Lis the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 600 and K = 600? b. Find the marginal productivities. c. Evaluate the marginal productivities with L= 600 and K = 600. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $1200 then there is a constraint L+ K = 1200. Use Lagrange multipliers (^) to find the values of L and K that will maximize production and find the maximum production f. Find and interpret 2 for this problem. only need part e and f!

1. Assume a daily production function for a firm is Q= min(3L, 4K) a, If L = 100 and K = 100 what quantity is produced? Explain why. b. What would be the cost-minimizing labor and capital combination for this firm to produce Q = 1200? (show your work) Labor = Capital = At this level of production from part b (Q-1200), if the wage rate is: w- $30 and the rental rate of capital is: r= $100, what is the total cost of production? (show your calculations) C.

Consider the following production function: q = 2V1 + 3VK Assume K = 16, derive the marginal product schedule for L. What direction is it moving? a. b. What returns to scale does the production function exhibit? Explain Let w = $4, r = $2, and K = 16; for the given values of a determine average fixed costs, average variable costs, average total costs, and marginal costs: C. L AFC AVC ATC MC 9 12 13 14 15 16 K 16 16 16 16 16

Suppose that the production function of a firm can be written as Q = 0.5K0.8L0.3. Which of the following is the equation for the average product of labor (APL)? O 0.3L-0.7 O K0.810.3 O 0.5K0.8L-0.7 O (0.7*0.5) K0.8L-0.7 O 0.5K0.810.3

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The slope of an isocost line is equal to the Select one: O a. O b. and is negative of the ratio of input prices; constant decreases as we move down the line; the ratio of the marginal products O c. is constant; the ratio of the marginal products O d. increases as we move down the line; the ratio of input prices