Question: i) derive the Total Cost Function, TC(q) ii) draw the isoquant for the given level of output iii) draw the isocost associated with the minimum
i) derive the Total Cost Function, TC(q)
ii) draw the isoquant for the given level of output
iii) draw the isocost associated with the minimum Total Cost of producing the given amount of output
iv) identify the cost minimizing amount of Labor and Capital (L* and K*),
v) label your graph carefully and accurately.
1.
Production Function: q = 3*MIN(L, 3K)
Input prices: w = 6, r = 9
q = 18
TC(q) = _____________________
Draw your graph in this space:
2.
Production Function: q = L1/2K1/2
Input prices: w = 9, r = 4
q = 6
TC(q) = _____________________
Draw your graph in this space:
3.
Production Function: q = 2L + 5K
Input prices: w = 2, r = 4
q = 10
TC(q) = _____________________
Draw your graph in this space:
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