1. Suppose a firm is producing output according to Q=100KL. A. Draw a sketch of this...

Transcribed Image Text:

1. Suppose a firm is producing output according to Q=100KL. A. Draw a sketch of this firm's isoquant map B. What equation do you use to find a cost-minimizing combination of inputs for a certain output level Q? K C. The marginal products of labor and capital are given by MP, = 50, and L respectively. The price of labor is $5 per unit, and the price of capital is $20 per unit. What is the cost-minimizing input combination if the firm wants to produce 2000 units? MPx = 50, 2. Suppose the level of capital stock in the short run is fixed to K, and you want to produce Q units of output produced according to Q=100KL. A. Write down a formula for the cost-minimizing choice of labor in this case B. Draw a graph of the cost-minimizing choice of labor in A) as a function of Q 3. Assuming the conditions in Problem 1 and your solution in Problem 2, derive a short- run total cost function for a fixed level of capital stock K. 1. Suppose a firm is producing output according to Q=100KL. A. Draw a sketch of this firm's isoquant map B. What equation do you use to find a cost-minimizing combination of inputs for a certain output level Q? K C. The marginal products of labor and capital are given by MP, = 50, and L respectively. The price of labor is $5 per unit, and the price of capital is $20 per unit. What is the cost-minimizing input combination if the firm wants to produce 2000 units? MPx = 50, 2. Suppose the level of capital stock in the short run is fixed to K, and you want to produce Q units of output produced according to Q=100KL. A. Write down a formula for the cost-minimizing choice of labor in this case B. Draw a graph of the cost-minimizing choice of labor in A) as a function of Q 3. Assuming the conditions in Problem 1 and your solution in Problem 2, derive a short- run total cost function for a fixed level of capital stock K.