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
Suppose that Lilistan has two types of citizens: low-income citizens (income = $20,000) and high-income citizens (income = $80,000). Interest income is currently taxed and each typ

Potatoes cost Janice $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first pound of potatoes is worth $1.50, the sec

Q. What is Keynesian model? Keynesian model is slightly more complicated than the classic model and it is developed in four stages by analysing four separate models. Every mode

Suppose that a widget market is described by the following supply and demand equations. Supply: Q = 3 P Demand: Q =400 - P a. Solve for the equilibrium price and the

Your Insurance firm processes claims through its newer, larger high tech facility and its older, smaller low-tech facility. Each month, the high-tech facility handles 10,000 claims

Suppose a consumer's income increases from $30,000 to $36,000. As a result, the consumer increases her purchases of compact disks (CDs) from 25 CDs to 30 CDs. What is the consumer'

How credit is created or the creation of credit

factor for long run trend of term of trade

The following is the information from the national income accounts for a hypothetical country:  GNP                                                                  Rs. 5000.00

A bakery has fixed costs of $10 per day and variable costs of $1 per loaf. Its oven can handle up to 50 loaves a day and it is impossible to obtain additional capacity. Sketch the