Answer letter D and E only. Show the necessary solution. 1. The production function of a small firm that produces t-shirts is given by the tablebelow.0 46.8.10 12 14 16 1820222418 33 57 72 84 93 99 102 102 99A. For each L, solve for AP and MP. Round-up your answers to two decimals.Represent your answers on a table. No need to show the solutions.B. What would be the output elasticities of labor? Round-up your answers to twodecimals. If the firm is hiring 16 and 12 workers, interpret the computed ɛ values.C. Identify the range of number of laborers under increasing marginal returns,diminishing marginal returns, and negative marginal returns.D. Explain why the firm experiences diminishing marginal returns.E. If the firm sells each t-shirt for P75 and each worker receives a wage of P450 perday, what is the optimal number of laborers to hire to maximize profits?

Answer: (D). Diminishing marginal returns: Diminishing marginal returns means as a firm increases…

Answered: 1. The production function of a small…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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D Question 32 BBT produces 137.5 units daily. The productivity factor of BBT's production is 2.75 and has elasticities of capital and labor of 0.4 and 0.6, respectively. In addition, the capital input used in its production is 55, 137.5, 275, and 343.75. How much is the labor input if the capital input to produce these units is 137.5? Round your answer to one decimal place.
2. A production function is given by the equation Q = 100L04K0.6 Where L is the number of labour units and K the capital units. a. Find marginal product of labour (Q₁) at L=4 and K=10. Interpret the result. aQ L at L=4 and K-10. ƏL Q b. Find the partial elasticity with respect to labour (EQL = Interpret the result. C. When Q-200, the marginal rate of technical substitution at L=4 is -0.21. Interpret that value (MRTS).
Answer the Constrained Optimization: Cobb-Douglas Production Function:1. Based from the factor shares of the two inputs, what will happen to the number of output ifit the firm decides to triple both the amount of labor and capital?2. State the optimization problem of the firm.3. Solve for the formulas of the Marginal Product of Labor (MPL), and Marginal product ofCapital (MPK)4. Using your knowledge of the tangency condition in Producer’s theory, find the combinationof K and L that the firm should use to produce the maximum possible output. Do not solvethe problem using the Lagrangian method.Note: The tangency conditions just states that the slope of the production function must beequal to the slope of the isocost function.5. What is the maximum possible output that the firm could earn given the constraint it faces?
12. The number of repairs produced by a computer repair shopdepends on the number of workers as follows:NUMBER OF WORKERS NUMBER OF REPAIRS(PER WEEK)0 01 82 203 354 455 526 577 60Assume that all inputs (office space, telephone, and utilities)other than labor are fixed in the short run.a. Add two additional columns to the table and enter the marginalproduct and average product for each number of workers.b. Over what range of labor input are there increasingreturns to labor? diminishing returns to labor? negativereturns to labor?c. Over what range of labor input is marginal product greaterthan average product? What is happening to average productas employment increases over this range?d. Over what range of labor input is marginal product smallerthan average product? What is happening to average productas employment increases over this range?
Suppose Mr. Saad is a producer of Lola Loo chocolate, following is the information available of his production plant. Quantity of Labour (L) Quantity of 1 2 3 4 5 Capital (K) 10 15 25 100 50 20 30 40 50 75 50 75 100 125 150200250 300 75 90 105 120 2 30 50 62 15 If K and Lare imperfect substitutes and complements from the information above draw at least three isoquant (map) and identify the level of production. H73 4
Consider the following production function: q = 9LK + 6L² – Assuming capital is measured on the vertical axis and labor is measured on the horizontal axis, determine the value of the marginal rate of technical substitution when K= 30 and L= 10. MRTS = -. (Enter a numeric response using a real number rounded to two decimal places.) 20 tv MacBook Air F6 FB 10 F3 23 2$ & з 4 6 7 8 { [ E Y U P D F G J K > C V N M command option - .. .- B
Hi- please answer both A and B A construction company has two types of employees: skilled and unskilled. A skilled employee can build 1 yard of a brick wall in one hour. An unskilled employee needs twice as much time to build the same wall. The hourly wage of a skilled employee is $15. The hourly wage of an unskilled employee is $8. a) Write down a production function with labor. The inputs are the number of hours of skilled workers, LS, the number of hours worked by unskilled employees, LU, and the output is the number of yards of brick wall, Q. b) What is the cost-minimizing way to build 100 yards of a wall?
Question Establish input demand function in case of multiple variable inputs
Suppose that hiring a third worker at the campus coffee shop increases sales from $115 per hour to $130 per hour. What is the marginal product of labor per hour from adding that third worker? Instructions: Enter your answer as a whole number. %24
Find the elasticity of scale and the elasticity of substitution for the CES production function: 1 1 f(x₁, x₂) = (x³ + x2)³. Solution: We first calculate the marginal products: 2 fx₁ = 3 + = x1fx1 -+ 2 2 10 - ² ( x² + x ) ( + x^²) = ( + + + + ² ) 15 ²0 x² -2/3 x₂ + x2fxz Elasticity of scale = _1₁_+_*__*(+)´<°¸«d«)*;»_ f(x1, f(x1, ‹2)² = -2/3 r2/3 = TRS = t (where TRS = =t). ⇒ r = t³/² ⇒ ln(r) = ln (t) and o = -2/3 dln (r) dln (t) To get elasticity of substitution, we first need TRS and denote r = 1 x3 X1 TMS - F (+4+2)0 = fx₁ fx₂ 2 1 + x²) x₂² MIN x2 3 -2/3 (x² -2/3 2 2/3 2/3 x1 -2/3 = r²/3 x¹/3 + 1/3 = 1.
The next 3 questions refer to the following: Labour Output 0 0 of 2 10 4 stion 26 6 46 8 65 10 72 12 80 14 86 Marginal Product when the number of workers increases from 2 to 4 workers is Marginal Product is maximized when the firm hires workers. Average Product is maximized when the firm hires workers. units.
If the first 5 units of labour produce 3 units of output each, and the second 5 units of labour produce 11 units each, then total product at 5 and 10 units of labour are Select one: 15 and 55 units 160 and 40 units 5 and 5 units 15 and 70 units

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