V
vbgirl4
Guest
You manage a plant that mass produces engines for use in agricultural and industrial applications that combines team sof workers with assembly machines. The technology is summarized by the production function Y=5KL where Y is the number of engines per week, K is the number of assembly machines and L is the number of labor teams. Each assembly machine rents for r= $10,000 per week and each labor team costs w= $5000 per week. Engine costs are given by the cost of labor teams and machines, plus $2000 per engine for parts and other materials. Your plant currently has a fixed installation of 5 assembly machines as part of its design.
a. What is the total cost function of your plant, TC= f
, namely how much does it cost to produce Y engines?
b. What are the average and marginal costs of producing Y engines? How do average and marginal costs vary with output?
c. How many labor teams are required to produce 250 engines given your plant's present layout? What then is the average cost per engine?
d. If free to choose the correct mix of K and L in building 250 engines, what would be you choice of K* and L*? What thenwould be the average cost per engine built?
e. You are asked to make recommendations for the design of a new engine production facility. What capital/labor (K/L( ratio should the new plant accommodate if it wants to minimize the total cost of producing at any level of output, Y?
This is for my agricultural economic analysis class and I am really lost on it. If you know how to do any of the questions please help me i would totally appreciate it!!!!!!!
a. What is the total cost function of your plant, TC= f
, namely how much does it cost to produce Y engines?b. What are the average and marginal costs of producing Y engines? How do average and marginal costs vary with output?
c. How many labor teams are required to produce 250 engines given your plant's present layout? What then is the average cost per engine?
d. If free to choose the correct mix of K and L in building 250 engines, what would be you choice of K* and L*? What thenwould be the average cost per engine built?
e. You are asked to make recommendations for the design of a new engine production facility. What capital/labor (K/L( ratio should the new plant accommodate if it wants to minimize the total cost of producing at any level of output, Y?
This is for my agricultural economic analysis class and I am really lost on it. If you know how to do any of the questions please help me i would totally appreciate it!!!!!!!