Suppose the process of producing lightweight parkas by Polly's Parkas is described by the functionq=40K04(L-40)0.6where q is the number of parkas produced, K the number of computerized stitching-machine hours, and L thenumber of person-hours of labor. In addition to capital and labor, $40 worth of raw materials is used in theproduction of each parka.Note thatandдаак=40(0.4)K 0.60 (L-40)0.6да=40K04 (0.6)(L-40) 0.4-0.40aLBy minimizing cost subject to the production function, derive the cost-minimizing demands for K and L as a functiof output (q), wage rates (w), and rental rates on machines (r).The cost-minimizing demands for K and Lare

Answered: Suppose the process of producing…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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AS U4 Read the following scenario. Superconductor technology is becoming a widespread and indispensible component of the machines we use today. Superconductors can be found in everything from transportation to electronic signal transmission. Due to our increasing reliance on technology, the demand for superconductors has skyrocketed. As a result, production has also increased exponentially, which has greatly reduced the cost per unit. Use the scenario to answer the following questions. Explain how the producer's marginal revenue, the marginal cost of producing superconductors, economic profit on superconductor technology, and the producer's economic profit have changed
Please don't copy ans Economics You are the owner of a motorbike company that currently has two different factories, an old one and a new one. The old factory uses an old technology that requires large amounts of labor to produce motorbikes. The production technology for the old firm is given by Fo(L) = m*L^1/2 . The new factory uses a much more modern production technology given by Fn(L) = n*L^1/2 . a. What are costs as a function of output for each individual factory? b. Suppose that you want to produce 1000 motorbikes. How many motorbikes will you produce at the old factory and how many will you produce at the new factory? c. Derive an expression for the total cost of producing y motorbikes (assuming that you always divide production between the factories in the optimal way). How does this cost function compare to the individual factory cost functions? d. It turns out that you can upgrade your old factory to make it just as efficient as the new factory. To pay…
Digging calms by hand in Sunset Bay requires only labor input. The total number of calms obtained per hour (q) is given by :Q = 100√LWhere L is labor input per hour. A. Graph the relationship between q an LB. What the average productivity of labor in Sunset Bay? Graph this relationship and show that output per unit of labor input diminishes for increase in labor input. C. It can be shown that the marginal productivity of labor in Sunset By is given by:MPL =50√LGraph this relationship and show that labor’s marginal productivity is less than average productivity for all values of L . Explain why this is do.D. Explain the concept of diminishing returns to labor and how this concept related to increasing marginal costs.
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Let us consider the cost implications of the short-run production schedule from assignment number 7, where capital was fixed at 2 units of capital. Labor: 0 1 2 3 4 5 6 7 8 9 Output: 0 6 24 60 120 170 210 240 260 270 In this scenario, since we only have two inputs (Capital and Labor), and since the amount of capital is fixed, the cost of total cost capital would also be Total Fixed Cost (TFC) and since labor is variable, the total cost of labor would be Total Variable Cost (TVC). In that context, assume that the cost of capital is $40 per unit per period, while the cost of labor (or wage rate) is also $30 per unit of labor per period. (a) Use this information set up a diagram (using excel) that shows total cost (TC) and total variable cost (TVC) of the firm per period in the short run with the level of output on the horizontal axi
Suppose that a unit of capital costs three times as much as a unit of labor.If a firm currently has a technology such that MPK =50, MPL =30, how should this firm adjust its capital and labor choices?
***PLEASE NOTE - An answer is NOT needed for parts A, B and C; these are included to assist with answering part D. Only an answer for part D is required, but it is derived from the previous answers*** Given: A farmer raises peaches using land (K) and labor (L), and has an output of ?(?,?)= ?0.5?0.5 bushels of apples. a. Find several input combinations that give the farmer 6 bushels of apples. Sketch the associated isoquant on a graph, with L on the x-axis and K on the y-axis. b. In the short run, the farmer only has 4 units of land. What is his short-run production function? Graph it for values of L from 0 to 16, with L on the x-axis and output on the y-axis. What is the name of the slope of this curve? c. Assuming the farmer still only has 4 units of land, how much extra output does he get from adding 1 extra unit of labor if he is already using only 1 unit of labor? How much extra output does he get from adding 1 extra unit of labor if he is already using 4 units of labor?…
The Cobb-Douglas production function is a classic model from economics used to model output as a function of capital and labor. It has the form f(L, C)=²1C²2 where co. ₁, and care constants. The variable L represents the units of input of labor and the variable C represents the units of input of capital. (a) In this example, assume co5, c, 0.25, and c₂-0.75. Assume sach unit of labor costs $25 and each unit of capital costs $75. With $70,000 available in the budget, devalop an optimization model for determining how the budgeted amount should be allocated between capital and labor in order to maximize output. Max s.t. L, CZO € 70,000 (b) Find the optimal solution to the model you formulated in part (a). What is the optimal solution value (in units)? (Hint: When using Excel Solver, use the bounds 0S LS 3,000 and 0 s Cs 1,000. Round your answers to the nearest integer when necessary.) units at (L. C)=(
V1
The production of a product is characterised by the function f(x, y) = 16x/4y3/4, where x is the number of units of labour and y is the number of units of capital needed to produce f(x, y) units of the product. Each unit of labour costs £50 and each unit of capital costs £100. You are given a budget of £500,000 and are asked to calculate the number of units of labour that maximise the production. Enter your answer as an integer. Answer:
Hello, please solve part d, e, and f only
AS U4 Read the following scenario. Superconductor technology is becoming a widespread and indispensible component of the machines we use today. Superconductors can be found in everything from transportation to electronic signal transmission. Due to our increasing reliance on technology, the demand for superconductors has skyrocketed. As a result, production has also increased exponentially, which has greatly reduced the cost per unit. Use the scenario to answer the following question. Calculate a long-run average cost curve for superconductors.

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