Suppose we have a linear production function F(L,K)=5L+2K. The prices of labor and capital are w=2...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose we have a linear production function F(L,K)=5L+2K. The prices of labor and capital are w=2 and r=10. a. Prove that this production function exhibits the constant return to scale. b. Find the long-run cost function of the firm. c. If price of capital drops to 4, what would be the long-run cost function. Suppose we have a linear production function F(L,K)=5L+2K. The prices of labor and capital are w=2 and r=10. a. Prove that this production function exhibits the constant return to scale. b. Find the long-run cost function of the firm. c. If price of capital drops to 4, what would be the long-run cost function.
Expert Answer:
Answer rating: 100% (QA)
Given the production function FL K 5L 2K and the respective labor and capital prices w 2 and r 10 lets perform the calculations a Constant Returns to ... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
Students also viewed these economics questions
-
The 2025 Annual Report of Blue International contains the following information: (in millions) Total assets Total liabilities Net sales Net income (a) (b) June 29, 2025 (c) $1,481 964 2,762 127 June...
-
A firm produces a product with labor and capital as inputs. The production function is described by Q = LK. The marginal products associated with this production function are MPL = K and MPK = L. Let...
-
The production function for a firm is given by Q = LK, where Q denotes output; Land K labor and capital inputs. Wage rate and rental rate are given by w and r respectively. (a) Show whether or not...
-
Explain the benefits of graphs over tables in presenting data.
-
Consider two antennas radiating 6.0-MHz radio waves in phase with each other. They are located at points S1 and S2, separated by a distance d = 175m, Fig. 26-61. What are the first three points on...
-
Ethane (C2H6) at 20C and 200 kPa and methane (CH4) at 45C and 200 kPa enter an adiabatic mixing chamber. The mass flow rate of ethane is 9 kg/s, which is twice the mass flow rate of methane....
-
Warren Smith practices medicine under the business title Warren Smith, M.D., P.C. During April, the medical practice completed the following transactions: The business uses the following accounts:...
-
The budgets of four companies yield the following information: Requirements 1. Fill in the blanks for each company. 2. Compute break-even, in sales dollars, for each company. Which company has the...
-
2) CANCAN Furniture began July with merchandise inventory of 45 sofas that cost a total of $31,500. During the month, Designer Furniture purchased and sold merchandise on account as follows: July 7...
-
During the Plan Order Phase, the hours for the Receive Order phase (marked with an *) are actual times, as this work has already been performed. In addition to these internal labors costs, the...
-
a. Draw a recursion tree for the recurrence T(n) = T(an) + ((1-a)n) + cn, where 0 < a < 1 and c> 0 are constants. Draw the nodes at three depths, i.e., level 0, 1, and 2 (root node is depth 0). Show...
-
1 2 A' = = 3 X 4 0,0,... Let U= {2, 3, 4, 9, 10, 13, 17, 19) and A={9, 10, 13). Find the set A'. LO 5 5 6 7
-
Given the information below Answer the questions. Account Title Debit Credit Cash $ 2 2 0 0 0 Accounts receivable 1 1 0 0 0 Prepaid expenses 4 0 0 0 Equipment 1 7 1 0 0 0 Building 1 0 0 0 0 0...
-
Showing initiative in the warehouse workplace is a prime reason why people receive promotions, get raises, and, in the case of interns, receive offers of full-time employment. Address the following....
-
Divide. 4 3 (-32x u + 28x u + 12x u7)(4x u4) Simplify your answer as much as possible. m
-
The stockholders equity section of Joshua Company shows the following on December 3 1 , 2 0 2 3 : Preferred stock, 5 % , $ 5 0 par value, 5 , 0 0 0 shares outstanding $ 2 5 0 , 0 0 0 Common stock, $...
-
A plant requires a new feedstock preparation system to chop lignocellulosic material into fibers at a rate of 50 tons per hour. The system consists of hammermill and a 0.6 m wide conveyor belt that...
-
Determine the volume of the parallelepiped of Fig. 3.25 when (a) P = 4i 3j + 2k, Q = 2i 5j + k, and S = 7i + j k, (b) P = 5i j + 6k, Q = 2i + 3j + k, and S = 3i 2j + 4k. P
-
Consider again the Battle of the Sexes game described in exercise 24.4. Recall that you and your partner have to decide whether to show up at the opera or a football game for your date with both of...
-
Businesses often give quantity discounts. Below, you will analyze how such discounts can impact choice sets. A: I recently discovered that a local copy service charges our economics department $0.05...
-
Business Application: Hiring an Assistant: Suppose you are a busy CEOwith lots of consumption but relatively little leisure. I, on the other hand, have only a part-time job and therefore lots of...
-
In assessing sampling risk, the risk of incorrect rejection of an account balance relates to the a. Efficiency of the audit. b. Effectiveness of the audit. c. Selection of the audit. d. Audit quality...
-
Which of the following sampling methods would be used to estimate a numerical measurement of a population, such as a dollar value? a. Discovery sampling. b. Sampling for variables. c. Sampling for...
-
Which of the following statements is correct concerning the auditor's use of statistical sampling? a. An assumption of PPS sampling is that the underlying accounting population is normally...
Study smarter with the SolutionInn App