EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 7.6, Problem 2MQ
To determine
To find the reason for exceeding SMC over MC at output level q*.
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You are the manager of a firm and you are required to optimize the Cobb-Douglas function given the following parameters. The maximum amount of money available to spend is $340 where the price of K=8 and the price of L=4. That is Pk=8 and Pl=4. The function is given as q=K0.4L0.6
.
What are the optimal values K0
and L0
?
a.
None of the above
b.
K0≈68,L0≈34
c.
K0≈72,L0≈18
d.
K0≈34,L0≈68
You are the manager of a firm and you are required to optimize the Cobb-Douglas function given the following parameters. The maximum amount of money available to spend is $340 where the price of K=8 and the price of L=4. That is Pk=8 and Pl=4. The function is given as q=K0.4L0.6
.
What is the Lagrangian?
a.
None of the above
b.
K0.4L0.6−λ(340−8K−4L)
c.
K0.4L0.6+λ(340−8K−4L)
d.
K0.4L0.6+λ(340+8K+4L)
Assume that a firm called Anonymous of Toronto decides to increases all of its inputs by 20 percent and as a
consequence its output increases by 25 percent, then
Chapter 7 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 7.1 - Prob. 1MQCh. 7.1 - Prob. 2MQCh. 7.1 - Prob. 1TTACh. 7.1 - Prob. 2TTACh. 7.2 - Prob. 1MQCh. 7.2 - Prob. 2MQCh. 7.2 - Prob. 1TTACh. 7.2 - Prob. 2TTACh. 7.3 - Prob. 1MQCh. 7.3 - Prob. 2MQ
Ch. 7.3 - Prob. 3MQCh. 7.3 - Prob. 1TTACh. 7.3 - Prob. 2TTACh. 7.5 - Prob. 1TTACh. 7.5 - Prob. 2TTACh. 7.6 - Prob. 1MQCh. 7.6 - Prob. 2MQCh. 7.6 - Prob. 3MQCh. 7.6 - Prob. 1.1MQCh. 7.6 - Prob. 2.1MQCh. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - Prob. 9RQCh. 7 - Prob. 10RQCh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.4PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.6PCh. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10P
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