Question: Continue from b) c) Suppose we are in the short-run. For a fixed K such that K = Kbar. Find the optimal value of L*.

Continue from b) c) Suppose we are in the short-run. For a fixed K such that K = Kbar. Find the optimal value of L*. (8 points)d) Let w be the price of each unit of labor and r be the price of each unit of capital.Calculate the short-run cost function. C^SR(q). e) Identify the variable cost and fixed cost in the short-run cost function, C^SR(q)that you calculated in d). f) Calculate the average cost and marginal cost of the short-run cost function,C^SR(q) that you calculated in d).

Question 6 (20 points) Consider the following production function. f ( L , K) = La . K 1-a a) State the formula and find the MRTS (L, K). (1 point each) b) State the 2 optimality conditions in the cost minimization problem. (1 points each) 9

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Answer the a) & b) from the pictures, and answer the following as well please. Beginner, please be detailed! Thank you!c) Suppose we are in the short-run. For a fixed K such that K = Kbar. Find the...

Kindly help me solve these problems. Show step by step workings Problem 4 - Optimal production The Acme Corp produces widgets using labor (L) and capital (K) according to the production, Q = F(L, K)...

Suppose we have the following production function: Q = min[100 K, 2L]. Confirm the technology is constant returns to scale (CRS). Show your work and explain what it means. (2 points) (b) Show the...

1. The following question refers to a model of imperfect monopsonistic wage discrimination against females like the one presented in class. a) Indicate how imperfect monopsonistic wage discrimination...

Kindly solve showing each step c) Suppose that there is a 40% chance the wage will rise to $15 What are the new short-run profit maximizing inputs, output, and the associated profit?5. Jorge has an...

soth a. On December 31, 2018, ABC Partnership's Statement of Financial Positions shows that A, B and C have capital balances of P500,000, P300,000 and P200,000 with profit or loss ratio of 1:3:6. On...

Detailed solu8tions. Problem 1 Slutsky equation Tomas is trying to figure out how to supplement the study allowances of 500 kr a week. He is considering a part-time job at a gas station. The wage is...

10. Consider a government with preferences represented by the loss function L = 72 + au2 where it is the inflation rate, u is the unemployment rate, and a is a positive con- stant indicating the...

uantitative Analysis BA 452 Homework 3 Questions Homework 3 covers the theory and applications in Lessons I-6 and I-7. This document has four parts: Objectives of doing your homework. Assignment of...

give all Problem 1. Demand Bengt's utility function is U(x1, x2)= x1 + ln x2 x1 - stamps x2 - beer Bengts budget p1 x1 + p2 x2 = m p1 - price of stamps p2 - price of beer m - Bengt's budget a) What...

Q 5.3 Determine the forces and reactions for the truss shown in the following Figure using matrix inverse function 800 45 250 30 30 Analytical Solution: Numerical Solution: 4- Transform engineering...

Describe the unique features of ascomycetes that lend themselves to genetic analysis.

In Giles' research, which of the following competencies scored highest? Question 5 options: a) Clearly communicates expectations. b) Is open to new ideas and approaches. c) Has high ethical and moral...

The IRS offers taxpayers the choice of allowing the IRS to compute the amount of their tax refund. During the busy filing season, the number of returns received at the Springfield Service Center that...

The following stockholders equity accounts arranged alphabetically are in the ledger of Galindo Corporation at December 31, 2017. Common Stock ($5 stated...

1. One of the reasons why certainty is the most favorable environment for problem solving is that it can be addressed through _____________ decisions. (a) Satisficing (b) Optimizing (c) Programmed...

Agriculturally derived butanol, C 4 H 10 O, with a molecular mass of 74.12, also called biobutanol, has a lower heating value LHV =33 075 kJ/kg for liquid fuel. Find its formation enthalpy.

Insert all words from a large file (such as the novel War and Peace, which is available on the Internet) into a hash set and a tree set. Time the results. Which data structure is more efficient?

15 What is meant by product life cycle pricing? The pricing needs to be increased at each stage in a products life cycle. The pricing of new products needs to start out high and end low. The pricing...

9. Think of any experience that has made a very strong impression on you, and where it did not go the way you thought it would. Imagine this experience as a movie in your inner theatre. Run this...

12. Think through the last week. If you could have changed some of your behaviour, what would you have changed? How would you have changed that? What would you seek to achieve by changing your...

The work role: This consists of service to others at your workplace.