ECON 22060 Midterm: Midterm II Summary
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All of the following have a few things in common that we discussed in class. After answering them write a summary of what those things are?
1. Consider a firm with production function f(L, K)=3L1/3K2/3. Assume that capital is fixed at K=1. Assume also that the price of capital r=5 and the price of labor w=3. Then, the cost of producing q units is?
A. | Ā |
C(q)=3+q2/9. |
B. | Ā |
C(q)=10+q3. |
C. | Ā |
C(q)=5+q3/9. |
D. | Ā |
C(q)=2/3+q2/3. |
E. | Ā |
C(q)=1/3+q3/3. |
2. Consider a firm with production function f(L, K)= 4L2/3K1/3. Assume that capital is fixed at K=1. Assume also that the price of capital r=4 and the price of labor w=2. Then, the average cost of producing q units is?
Ā | A. |
AC(q)= 4/q+q1/2/4. |
Ā | B. |
AC(q)= 2/q+1/4q1/3. |
Ā | C. |
AC(q)= 2/3q+1/q1/3. |
Ā | D. |
AC(q)= 1/3q+q1/2. |
Ā | E. |
AC(q)=8/q+2q1/2. |
Consider a firm with production function f(L, K)= 4L2/3K1/3. Assume that capital is fixed at K=1. Assume also that the price of capital r=4 and the price of labor w=2. Then, the marginal cost of producing q units is?
A. | Ā |
MC(q)= 3q1/2/8. |
B. | Ā |
MC(q)= 2/3q1/3. |
C. | Ā |
MC(q)=3/2q1/2. |
D. | Ā |
MC(q)=3q1/2. |
E. | Ā |
MC(q)=1/6q1/3. |