Calculate the total cost and minimum cost, Macroeconomics

Consider a hospital that produces output (Q) and has two production inputs, nurse-hours (N) and beds

(B). the hospital faces input costs of WN = 15 and WB = 25. Assume the hospital's production function is: Q =NαB1-α, where α1/2.

a) If the hospital's desired output level is Q = 120, find B∗ and N∗ that minimize cost.

b) What is the hospital's total cost, C, of producing this level of output using B∗ and N∗?

c) Suppose the state government imposes a certificate of need constraint on the number of beds. The new CON rule limits the number of beds to BR = 250. Assuming the hospital would like to keep its output level at 120, how many nurse-hours (NR) will it require?

d) Suppose instead the CON rule limits the number of beds to BR ′ = 100. Again, assuming the hospital keeps its output level constant, how many nurse-hours (NR′) will it now require?

e) What is the hospital's total cost of producing this level of output using BR′ and NR′?

f) Now suppose the hospital must keep its costs equal to its costs before the CON law. How many nurse-hours will it now require? What will its new output level be?

Posted Date: 3/1/2013 5:13:15 AM | Location : United States







Related Discussions:- Calculate the total cost and minimum cost, Assignment Help, Ask Question on Calculate the total cost and minimum cost, Get Answer, Expert's Help, Calculate the total cost and minimum cost Discussions

Write discussion on Calculate the total cost and minimum cost
Your posts are moderated
Related Questions
when the income velocity of circulation (V) rises, why does the economy''s total output must rise?

There are three industrial firms in a quaint town of South Orange where the municipal government wants to reduce pollution to 120 units from uncontrolled level of 210 units. Three

Suppose that Ana is buying only 2 goods: good 1 and 2. If the price of good 1 doubles and the price of good 2 drops by one third, then what happens with the budget constraint? (Ass

The quantity of coffee demanded, QD, depends on the price of coffee, Pc, and the price of tea, PT. The quantity of coffee supplied, QS, depends on the price of coffee, Pc, and the

An agency is having problems with personal phone calls made during working hours. Each minute of a personal call costs the agency $0.50 in wasted wages. The agency decides to hire

Financial and Real Investment Financial investment simply means transfer of right from one party to another. While one party has made investment, the other has made disinvestme

What impact will high and variable rates of inflation have on the economy? How will they influence the risk accompanying long-term contracts and related business decisions?

Assume that the demand for running shoes is highly inelastic and the supply curve for running shoes is highly elastic. Suppose that the tastes of the exercising public shift away f

Explain modern theory of rent eith diagrams and defination

Evaluate your workplace and identify a group that has "power" in the organization. Analyze why the group is considered powerful. a. What are the elements that contribute to the gro