There are two factors of production, X and Y. They are being used to produce a fixed amount of output called A. If the amount of output, A is held constant, and the isoquants are convex, would the price of X going down always mean less of Y is used? Explain why or why not by explaining through the use of a graph

Which of the following statements are true? A basic assumption of the theory of production is that: A firm cannot borrow money to finance its input expenditures. A firm can buy as much labor and capital as it desires in the long-run A firm can reduce the number of workers it uses, but it cannot adjust how much capital it uses in the short-run When the marginal product of labour starts falling, the firm must cease production a. II only b. II and III c. I, III and IV d. II, III and IV

What is the production function if labor, L, and capital, K, are perfect substitutes and each unit of q requires 0.2 units of L or 0.2 units of K (or a combination of these inputs that adds to 0.2)? The production function is es Get more help - q= Clear all Check answer

a) What are the determinants of production? Explain.b) Suppose that an economy’s production function is in the Cobb–Douglas form with parameter α = 0.3. What is the production function equation? What does each component stand for?

How do you create a concave production possibilites curve graph?

X and Y are factors of production. They are used to make a fixed output, Z, of the product. The isoquants are convex. If Z, the output produced is held constant, will a decrease in X's price always cause the quantity of Y being used to decrease? Explain and show in a graph.

3. Elsa's handicrafts has the production function f(x1,x2) = (min{x1 ,2x2})2, where x, is the amount of plastic used, x, is the amount of labor used, and f(x1,x2) is the number of lawn ornaments produced. Let w, be the price per unit of plastic and w, be the wage per unit of labor. а. What is Elsa's cost function c(w1,w2,y)? b. If wi = w2 = 1, then what is Elsa's marginal cost of producing y units of output? What is the number of units of output that she would supply at price p? At these factor prices, what is her average cost per unit of output? c. If the competitive price of the lawn ornaments she sells is p = 48, and w, = w2 = 1, how many will she produce? How much profit will she make? d. More generally, at factor prices w, and w2, what is her marginal cost? At these factor prices and an output price of p, what is the number of units she will choose to supply?

An economy has the following Cobb-Douglas production function: ?=100?^(1/3)?^(2/3) . The economy has 125 units of capital and 64 units of labor. d. Calculate the marginal product of capital MPK. e. Calculate the marginal product of labor (MPL).

Consider a firm for which production depends on two normal inputs, labor and capital, with prices w and r, respectively. Initially the firm faces market prices of w = 6 and r = 4. These prices then shift to w = 4 and r = 2.a. In which direction will the substitution effect change the firm’s employment and capital s tock?b. In which direction will the scale effect change the firm’s employment and capital stock?c. Can we say conclusively whether the firm will use more or less labor? More or less c apital?

A firm’s total expenditure E on inputs is determined by the formula E = PKK + PLL where K is the amount of input K used, L is the amount of input L used, PK is the price per unit of K and PL is the price per unit of L. Is one unique value for E determined by any given set of values for K, L, PK and PL? Does this mean that any one particular value for E must always correspond to the same set of values for K, L, PK and PL?