### What is the least-cost combination of labour and capital

Assignment Help Microeconomics
##### Reference no: EM13849973 , Length:

Need to support answers with appropriate Harvard style references where necessary.

1. What would the consumers' and producers' tax incidences be equal to if the government imposed an excise tax when:

(a) demand was perfectly elastic

(b) demand was perfectly inelastic

(c) supply was perfectly elastic

(d) supply was perfectly inelastic?

Draw graphs to support your arguments.

You are requested to submit your assignment on Turnitin for checking Plagiarism

2. Indicate how each of the following-(a) to (e) on the next page-would shift the (i) marginal- cost curve, (ii) average-variable cost curve, (iii) average-fixed-cost curve, and (iv) average- total-cost curve of a manufacturing firm. In each case specify the direction of the shift.

 TOTAL PRODUCT TOTAL FIXED COST TOTAL VARIABLE COST TOTAL COST AVEREGE FIXED COST AVEREGE VARIABLE COST AVEREGE TOTAL COST MARGINAL COST 0 0 1 45 2 85 3 120 4 150 5 185 6 225 7 270 8 325 9 390 10 465

(a) A reduction in business property taxes

(b) An increase in the nominal wages of production workers

(c) A decrease in the price of electricity

(d) An increase in insurance rates on plant and equipment

(e) An increase in transportation costs.

3. Suppose the productivity of labour and capital are as shown in the table at the top of the next page. The output of these resources sells in a purely competitive market for \$1 per unit. Both labour and capital are hired under purely competitive conditions at \$1 and \$3 respectively.

(a) What is the least-cost combination of labour and capital to employ in producing 80 units of output? Explain .

(b) What is the profit-maximising combination of labour and capital for the firm to employ? Explain. What is the resulting level of output?

(c) When the firm employs the profit-maximising combination of labour and capital as determined in (b), is this combination also the least costly way of producing the profit-maximising output? Explain.

 Units of labour Total product Marginal physical product Product price Total revenue Marginal Revenue product 1 17 2 2 31 2 3 43 2 4 53 2 5 60 2 6 65 2

 Units of capital MP of capital Units of labour MP of labour 1 24 1 11 2 21 2 9 3 18 3 8 4 15 4 7 5 9 5 6 6 6 6 4 7 3 7 1

Verified Expert

#### Write an editorial considering

Pretend that you are an editorialist, and write an editorial considering whether or not you believe that monopolies should be illegal and defend your argument using pertinen

#### Difficult for companie to establish themselves as monopolies

How has the World Wide Web allowed supported the establishment and functioning of these businesses - Do you think that the World Wide Web has made it easier or more difficult

Using Demand and Supply model of exchange rate determination briefly explain how AUD is determined in the forex market, and what factors influence its fluctuations.

#### Identify assess possible opportunities for growth

Identify and critically assess possible opportunities for growth within the organisation's MACRO environments. Write a logical, well-presented and accurately referenced piece

#### Current state of the australian economy

Prepare a report on the current state of the Australian economy and its management by the Federal government. You need to do this by examining the four economic indicators of

#### Xplain why scarcity forces individuals and society

Explain why scarcity forces individuals and society to incur opportunity costs. Give specific examples. (2.5 marks for explanation and diagram plus 2.5 marks for specific exam

#### The wool industry in hypothetica is highly competitive

The wool industry in Hypothetica is highly competitive with the many woolgrowers seeing themselves as being price takers in an industry with no significant barriers to entry.

#### Consider the iron ore production industry and assume

Consider the iron ore production industry and assume that there are just two producers. Both of firms are identical in terms of their production cost, if the two firms can coo