Question: A cost-minimising firm has production function y = min (4x1,x2). Input prices are wi and w2. a) For a given target output Y, draw

A cost-minimising firm has production function y = min (4x1,x2). Input prices are wi and w2. a) For a given

A cost-minimising firm has production function y = min (4x1,x2). Input prices are wi and w2. a) For a given target output Y, draw the corresponding isoquant and a number of isocost lines. Identify in the graph the cost minimising input bundle b) Find analytically the cost minimising bundle and the resulting cost function. A cost-minimising firm has production function y-L+ 2K Input prices are wi for labour and wk for capital. a) For a given target output Y, draw the corresponding isoquant and several isocost lines with different slopes. Identify in the graph the cost minimising input bundle in each case b) Find analytically the cost minimising bundle and the resulting cost function as a function of the ratio WL/ WK.

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