Leibniznotationftw
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Production function: f(K,L) = L^0.5 +K
Price of capital = $2
Price of labor = $3
The firm also pays a license fee of $10
a) What are the quantities of labor and capital that minimize the cost of producing any given output?
b) What is the minimum cost of producing y units of output?
c) Find the marginal cost of production, the average total cost, the average variable cost and the average fixed cost.
2) According to a pizza maker, it takes one large pizza and a 1.5 L Coke to make a meal
. Let factor-1 be large pizzas, and factor-2 be 1.5L Cokes. Assume factor prices w1=$10 and w2=$2
a)Write down a production function representing the technology of making meals with pizzas and cokes. Give three formulas for isoquants representing this technology. Does it exhibit increasing, decreasing, or constant returns to scale?
b)Derive the cost of production, as a function of the number of meals made, y.
c)Derive the formulas for the marginal and average cost curves for the cost function in (b).
The first person to answer completely all questions with all work shown will get full points and best answer.
Price of capital = $2
Price of labor = $3
The firm also pays a license fee of $10
a) What are the quantities of labor and capital that minimize the cost of producing any given output?
b) What is the minimum cost of producing y units of output?
c) Find the marginal cost of production, the average total cost, the average variable cost and the average fixed cost.
2) According to a pizza maker, it takes one large pizza and a 1.5 L Coke to make a meal
. Let factor-1 be large pizzas, and factor-2 be 1.5L Cokes. Assume factor prices w1=$10 and w2=$2a)Write down a production function representing the technology of making meals with pizzas and cokes. Give three formulas for isoquants representing this technology. Does it exhibit increasing, decreasing, or constant returns to scale?
b)Derive the cost of production, as a function of the number of meals made, y.
c)Derive the formulas for the marginal and average cost curves for the cost function in (b).
The first person to answer completely all questions with all work shown will get full points and best answer.