Economics questions

Nov 2nd, 2014
Anonymous
Category:
Accounting
Price: $35 USD

Question description

1. Explain if each of the following statements is true or not:

i. If average product is increasing, marginal product must be less than average product.

ii. If marginal product is negative, average product must be negative.

iii. If average product is positive, total product must be increasing.


2. Suppose that a firm has the production function given by f(x1,x2)=4√(x1x2). Let w1 = $64 and w2 = $1. What is the total cost of producing 20 units of output in the long-run?


3. Consider the same firm as in question 2, who is facing the same input prices

w1 and w2 as above. Suppose that we are now in the short-run and the

firm has to use x2 = 4. What is the short-run cost of producing 72 units of 

output?


4. A firm produces an output using capital and labor using the production technology described by f(xL,xK) = xLxK. Let w denote the price of labor and r denote the price of capital. Assume that w = $2 and r = $1. Derive the equations for the total, average and the marginal cost functions of this firm. 


Tutor Answer

(Top Tutor) Studypool Tutor
School: UCLA
PREMIUM TUTOR

Studypool has helped 1,244,100 students
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1827 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors