Question: Derive the total, average and marginal long run cost functions for the production function: Question 7: Derive the total, average and marginal long run cost

Derive the total, average and marginal long run cost functions for the production function:

Question 7: Derive the total, average and marginal long run cost functions for the production function: a) Q = K + L, if input prices are Wk = 6 and WL = 10. b) Q = 9KL, if input prices are Wk = 81 and WL = 9. Question 8: A firm has access to two production processes with the following marginal cost curves: MC1 = 0.4Q1 and MC2 = 2 + 0.2Q2, where both MCs are in $/unit of output. a. If it wants to produce 8 units of output, how much should it produce with each process? b. If it want to produce 4 units of output? Question 9: For each production function and set of prices derive the firm's optimal bundle of capital and labour and the firm's cost function: Production WL WK Quantity to function Produce (Qo) a. 1 2 L3K 3 2 2 100 b. L + 2K 2 6 200 C. min {2L, K} 3 6 90

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