Question: Suppose that Hannah and Sam's production function, wage rate, and price of capital are the same as in problem 5. What is their cost function?

Suppose that Hannah and Sam's production function, wage rate, and price of capital are the same as in problem 5. What is their cost function?
Q = F (L, K)
Q = 10L0.2 K0.3
The wage rate is $1,500 per week and the cost of renting a unit of capital is $1,000 per week. What is their cost function?

Step by Step Solution

★★★★★

3.48 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

CQ 23 Q 2 Explanation Let us solve the problem using general parameters We will the... View full answer

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

847-B-E-D-S (2755).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Suppose that the production function for Hannah and Sam's home remodeling business is Q = F(L,K) Q = 10L0.2K0.3 Assume the wage rate is $1500 per week and the cost of renting a unit of capital is...

Suppose Noah and Naomi's short-run weekly production function for garden benches is where L represents the number of hours of labor employed. The wage rate is $15 an hour. What is their cost...

Suppose Noah and Naomi's weekly production function for garden benches is F( L) = (3/2) L, where Lrepresents the number of hours of labor employed. The wage rate is $15 an hour. What is their cost...

QUESTION 15 Given the same production function, wage rate, and rental rate from the problem above, was it the firm's total cost function for producing q units of output? O TC(q) = 2q O TC(q) = 4q O...

W = $ 80 K = 5 P = $ 500 P x = $ 11,000 5 units of capital = 11,000 1 unit of capital = 2,200 Q = 2 ( 5 ) 1/2 ( L ) 1 / 2 Q = 4.47 ( L ) 1/2 MP L = 4.47 / L 1/2 MP L * Price = Wage ( 4.47 / L 1/2 ) *...

Suppose that Hannah and Sam have the production function Q = F(L, K) Q = 1010.5 0.5 The wage rate is $1,000 per week and a unit of capital costs $4,000 per week. a. True or false? If we plot L along...

SOLVE ALL, You have recently been hired as a consultant for Cranberry Distributors. Cranberry Distributors grows and ships cranberries to several international clients with invoices denominated in...

1. Leslie's current consumption bundle of 15 hot dogs and 10 sodas each week is on his budget constraint. At Leslie's current level of consumption, his marginal utility from hot dogs is equal to 7,...

acc On January 1st. 2017, X Company bought 80% of the outstanding common shares of the Y Company for $140,000 cash. On that date Y Company had $50,000 of common shares outstanding and $60,000...

Suppose that Hannah and Sam have the Cobb-Douglas production function Q = F(L,K) = 10L0.25K0.25 Both a worker and a unit of capital cost $1,000 per week. If Hannah and Sam begin by remodeling 100...

Prepare a balance sheet from the following Accounts Receivable$200,000 Accounts Payable $100,000 Common Stock $500,000 Cash $100,000 Note Payable (short term) $100,000 Inventory $380,000 Long Term...

Suppose that a 2-year, 5% annual coupon payment government bond can be bought or sold at a price of 103 (per 100 of par value). Is there an opportunity for coupon-stripping or bond reconstitution?...

Which of the following is false? Select one The fnancial planner of an ongoing client should proactively check in with the client to see if there are substantial life changes that might afect the...

Why is it important to involve stakeholders in the Define Scope process? a) To ensure that the project is completed on time b) To ensure that all stakeholder needs and requirements are captured and...

1. The short-run marginal cost curve is shaped like the letter _____and the short-run average cost curve is shaped like the letter _____. 2. The negatively sloped portion of the short-run marginal...

Exercise 10-8 (Algo) Direct Materials and Direct Labor Variances [LO10-1, LO10-2] Dawson Toys, Limited, produces a toy called the Maze with the following standards: Direct materials: 7 microns per...

Serial Problem Business Solutions LO P1, P2, P3, P4, P5 After the success of the company's first two months, Santana Rey continues to operate Business Solutions. The November 30, 2017 unadjusted...

solve part b only Question 3: (Total 10 marks) Use the information presented below to answer the questions: A. Record the following transactions in the Enterprise Fund of the country: (1*5: 5Marks)...