U.S. electronics manufacturer is considering moving its production abroad. Suppose its production function is q=L0.7K0.3 the United States, w = $7 and r=3. In Mexico, the wage is 50% lower than in the United States but the firm faces the same cost of capital: *$3.50 and r* = 3. What are L and K and what is the cost of producing q = 100 units in both countries? (for all of the following questions, enter a numeric response sing a real number rounded to two decimal places) the U.S., L is, K is, and the cost of production is $ Mexico, Lis Kis and the cost of production is $
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- A U.S. electronics firm is considering moving its production abroad. Its production function is: q=L = L 0.50 0.50 (based on Hsieh, 1995), so MPL = 0.5q/L and MPK = 0.5q/K. In the United States, w=$10=r. At its Asian plant, the firm will pay a 10% lower wage and a 10% higher cost of capital: w* = $9.09 and r* = $11.00. What are L and K and what is the cost of producing q= 100 units in both countries? (for all responses, enter a real number rounded to two decimal places) In the U.S., L is 100, K is 100, and the cost of production is $ 2000 In Asia, Lis2. Consider the production function: f(K,L) = K*L%. Let w and r denote the price of labor and capital. (a) Find the cost minimizing input bundle as a function of w, r, and q. Find the cost function. (b) Suppose two countries, A and B, have the access to the same production technology f(-) given above. Firms in both countries are cost-minimizers. Yet, the firm in country A uses relatively more labor and less capital than the firm in country B to produce the same level of output. What will ex- plain this?The per-unit cist of an item is its average total cost=(=total cost/quantity). Suppose that a new cell phone application costs $100,000 to develop and only $0.70 per unit to deliver to each cell phone customer. What will be the per-unit coat of the application if it sells 100 units? What will be the per-unit coat of the application if it sells 1,000 units? What will be the per-unit cost of the application if it sells 1 million units?
- A firm's production technology is Y = A * K^0.25 * L^0.75, where the technology level A=8. For such a production function the marginal product of capital is MPK = 0.25 * 8 * K^-0.75 * L^0.75 The firm is stuck with K=81 but is flexible on workers. If the price of the firm's output is P=20 and the cost of a unit of capital is R=8.33, how many workers should the firm have? Round your answer to the whole worker. The Answer is 10 I just need help figuring it outKarol has a coffee shop and produces coffee drinks under the production function Q = F(K,L) = 5K + L , where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). Suppose Karol needs to produce 500 cups of coffee and the price of capital is 40 euro per unit and the price of labor (wage) is 20 euro per unit. If Karol minimizes costs, how much capital and how much labor should he employ?The following production function describes the production of buttons made of plastic: q = (4K0.5 +L0.5) with K ... machinery, L ... labor. Rents for capital are r = 10000€, each worker costs 5000€ a month. a) Will a labor-capital ratio of 2.5 minimize total production costs in the long run?
- Q1.The following is a Cobb-Douglas production function: Q = 1.75K0.6L0.5. What is correct here? * -This production function displays constant returns to scale -This production function displays increasing returns to scale -A one-percent change in L will cause Q to change by one percent -This production function displays decreasing returns to scale Q2. For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use? * -consumer surveys, where potential customers hear about the product and are asked their opinions -double log functional form regression model -ordinary least squares regression on historical data -market experiments, where the price is set differently in two marketsA firm has two opportunities for a new plant location, one is in China and the other is inMexico. The firm's production function is given by q = L 0.5 K 0.5 , In China, the cost of laboris w=$15 and the cost of capital is r=$5. In Mexico, w=$10 and r=$10. The firm wants toproduce 100 units of output. Which location should the firm choose for their new plant?Explain why.Note: Please round the optimal amounts of capital and labor at each location to the nearest whole number when making your calculations.Hint: cost-minimization rule.1. A firm's production technology is Y = A * K^0.25 * L^0.75, where the technology level A=8. For such a production function the marginal product of capital is MPK = 0.25 * 8 * K^-0.75 * L^0.75 The firm is stuck with K=81 but is flexible on workers. If the price of the firm's output is P=20 and the cost of a unit of capital is R=8.33, how many workers should the firm have? Round your answer to the whole worker. The answer is 10. I just need to know how to solve it
- Q2: Suppose that a firm's production function of output Q is a function of only two inputs, L and K and can be written Q = L+ 4K. Let w = 5 and r = 25. If the firm produces 100 units of output, how many units of capital will it use? Q3: Suppose that a firm's production function of output Q is a function of only two inputs, L and K, and can be written Q = = min ( K , 2L). Let w 5 and r = 10. If the firm produces 20 units of output, how many units of capital will it use?Find the minimum cost of producing 30000 units of a product, where x is the number of units of labor, at $91 per unit, and y is the number of units of capital expended, at $96 per unit. And determine how many units of labor and how many units of capital a company should use. Where the production level is given by... 0.60.4 P(x, y) (Round your first and second answers to 4 decimal places.) units of labor. Submit Answer Tries 0/20 y = units of capital. Submit Answer Tries 0/20 (Round this third answer to 2 decimal places.) Min cost = $ Submit Answer Tries 0/206. Which one of the following production functions represents an increasing returns to scale technology, where e is labour and k is capital? a) F(£,k) = e1/2 + k1/2. b) G(2,k) = {2/3k^/2. c) H(e,k) = min{{, 2k} d) I(e, k) = 3l + 2k.