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28 Sep 2019
- Essay Question:
Assume a firm uses two inputs in its production process: labour and capital. Using isocost and isoquant analysis, examine the possible effects of an increase in wage on the firmâs
(a) use of labour and capital
(b) long-run total and average costs.
- Problem Question:
a) Derive the cost minimizing input demands and the long-run total cost function for the following production functions assuming input prices w1 and w2:
(i) y = f(x1, x2) = 2x1 + x2
(ii) y = min(x1, 3x2)
b) For each of the production functions above, determine the short-run input demands and short run total cost function when input 2 is limited to x2 = 100 units
- Essay Question:
Assume a firm uses two inputs in its production process: labour and capital. Using isocost and isoquant analysis, examine the possible effects of an increase in wage on the firmâs
(a) use of labour and capital
(b) long-run total and average costs.
- Problem Question:
a) Derive the cost minimizing input demands and the long-run total cost function for the following production functions assuming input prices w1 and w2:
(i) y = f(x1, x2) = 2x1 + x2
(ii) y = min(x1, 3x2)
b) For each of the production functions above, determine the short-run input demands and short run total cost function when input 2 is limited to x2 = 100 units
Paramjeet ChawlaLv8
28 Sep 2019
