Calculate total cost of production for each of five outputs

Assignment Help Econometrics

Reference no: EM13212906

Suppose that wimps can be produced using two different production techniques, A and B. The following table provides the total input requirements for each of five different total output levels: Q = 1 Q = 2 Q = 3 Q = 4 Q = 5 TECH. K L K L K L K L K L A 2 5 1 10 5 14 6 18 8 20 B 5 2 8 3 11 4 14 5 16 6

a. Assuming that the price of labor (PL) is $1 and the price of capital (PK) is $2, calculate the total cost of production for each of the five levels of output using the optimal (least-cost) technology at each level.

b. How many labor hours (units of labor) would be employed at each level of output? How many machine hours (units of capital)?

c. Graph total cost of production as a function of output. (Put cost on the Y-axis and output, Q, on the X-axis.) Again, assume that the optimal technology is used.

d. Repeat a. through c. under the assumption that the price of labor (PL) rises from $1 to $3 while the price of capital (PK) remains at $2.

Reference no: EM13212906

Questions Cloud

Calculate the implied arc income elasticity of demand : Deluxe Carpeting a leading manufacturer of carpeting sold 28 million square yards of carpeting at a price of $16 per yard. This year, GNP per capita is expected to fall from $19,000 to $17,000 as the nation enters a recession. Deluxe expects that ..

What is the advantage of sketching an object : What is the advantage of sketching an object first before drawing it using CAD?

Determine the magnitude of its total accleration : determine the magnitude of its total accleration when (a) t=0 and (b) t=2 Whats the solution.

What is the length of the slope of the ramp : Using the knon height and calculated base lenghth, what is the length of the slope of the ramp.

Calculate total cost of production for each of five outputs : The following table provides the total input requirements for each of five different total output levels: Q = 1 Q = 2 Q = 3 Q = 4 Q = 5 TECH. K L K L K L K L K L A 2 5 1 10 5 14 6 18 8 20 B 5 2 8 3 11 4 14 5 16 6 a.

Determine the acceleration of the cabinet : Determine the acceleration of the cabinet when sA = 40 ft. Note that when sB = 0, sA = 0 (points A and B are coincident).

State the hydrothermal fluids escape into the open seawater : why metal sulfide compounds can only form after the hydrothermal fluids escape into the open seawater.

Who is only supplier of a good located in a particular town : A firm, which is the only supplier of a good located in a particular town, is accused of engaging in anticompetitive tactics in order to protect its monopoly position in that town. As part of its defense, the firm has argued that the geographic an..

State a solution of glyceraldehyde a mass percentage : A solution of glyceraldehyde, C3H6O3, has a density of 1.15 g/mL, and a mass percentage of 28.1% glyceraldhyde at 25 deg C. (molar mass = 90.078g/mol)

User Account

All Pages