Steel producer has the production function

Assignment Help Business Economics

Reference no: EM13740616

A steel producer has the production function q=10K^0.75 E^0.25 where q is the quantity of steel, in metric tons, K is the firm's capital stock, and E is the number of labor hours it employs (measured in thousands). a) Assume the firm's current capital stock is fixed at K = 4096. If the firm employs E = 81 labor units, then how much steel does it produce?

b) Suppose the firm receives an order to produce 10,000 metric tons of steel. If its capital stock is fixed at K = 4096, then how many hours of labor must it employ to satisfy the order?

c) In the long run, the firm is free to vary both its capital stock and the number of workers it employs. Given this, what would happen to the firm's output if it doubles the amount of labor and capital it uses? What happens if it quadruples the amount? What does this result suggest in general?

Reference no: EM13740616

Questions Cloud

Quotation marks for anything that is directly from article : Use quotation marks for anything that is directly from the article. Include the exact URL that can be clicked to directly retrieve the article at the end of your paper for citation purposes.

How is the effectiveness of team selling demonstrated : How is the effectiveness of team selling demonstrated by the Reynolds team, and what are some of the vantages to this method in this particular case?

Supply labor in elastically : Given a production Yt=(Abar)Kt^(1/3)Lt^(2/3) and K*=1000 and Abar=3/2. and also there are Lbar=1000 workers who supply labor in elastically. What does the long run model say wage in this economy is?

Willing to pay for the privilege of moving : In the following game, determine the maximum amount you would be willing to pay for the privilege of moving (a) first, (b) second, or (c) third: There are three players, you and two rivals. The player announcing the largest integer gets a payoff of $..

Steel producer has the production function : A steel producer has the production function q=10K^0.75 E^0.25 where q is the quantity of steel, in metric tons, K is the firm's capital stock, and E is the number of labor hours it employs (measured in thousands). a) Assume the firm's current capita..

Collects unemployment and labor force participation data : The U.S. Bureau of Labor Statistics (BLS) collects unemployment and labor force participation data for a variety of groups of Americans (by age, gender, race, level of education, location, etc.). This data is available http://www.bls.gov. (You can fi..

The future worth of a series of equal monthly payments : What is your monthly interest rate and what is your annual effective interest rate? What is the future worth of a series of equal monthly payments of $5,000 if the series extends over a period of six years at 9% interest compounded? You borrowed $150..

What was the constant dollar percent increase in gdp : In 1988 the US gross domestic product (GDP) increased to $4.90 trillion at year end, from the 1987 year end level of 4.54 trillion in actual escalated dollar values. In the same year, the consumer price index rose approximately 4%. What was the const..

Use combined state and federal marginal tax rate : A corporate expects to receive $34,688 each year for 15 years if a particular project is undertaken. There will be an initial investment of $122,261. The expenses associated with the project are expected to be $7,426 per year.

User Account

All Pages