Starting from L=6 and K = 1, how much extra capital isneeded to keep output constant if the labor is reducedfrom L=6 to L=4? How much extra capital is neededto keep output constant if labor is reduced from L=4 toL=2?X123456K12028344044482283844485254L334445054586054452586446404848545460606664 687066 70 72Using the four-point dved line drawing tool, graphthe firm's isoquant for an output level of 48. Label this'q=48.'CCOK, Capital244

The labor force in economics means the total number of individuals who are employed or actively…

Starting from L=6 and K = 1, how much extra capital is needed to keep output constant if the labor is reduced from L=6 to L=4? How much extra capital is needed to keep output constant if labor is reduced from L=4 to L=2? K1234 5 6 1 20 2 28 28 38 44 34 40 44 48 48 52 54 L 3 34 44 50 54 58 60 4 40 48 54 60 64 5 4 52 58 6 48 4 60 66 70 77 44 64 68 66 70 54 72 Using the four-point daved line drawing tool, graph the firm's isoquant for an output level of 48. Label this "q=48.' K, Capital 24

Starting from L=6 and K = 1, how much extra capital is needed to keep output constant if the labor is reduced from L=6 to L=4? How much extra capital is needed to keep output constant if labor is reduced from L=4 to L=2? K1234 5 6 1 20 2 28 28 38 44 34 40 44 48 48 52 54 L 3 34 44 50 54 58 60 4 40 48 54 60 64 5 4 52 58 6 48 4 60 66 70 77 44 64 68 66 70 54 72 Using the four-point daved line drawing tool, graph the firm's isoquant for an output level of 48. Label this "q=48.' K, Capital 24

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.8P

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A firm can use three different production technologies, with capital and labour requirements at each level of output as follows:Daily OutputTechnology 1 Technology 2 Technology 3K L K L K L100 3 7 4 5 5 4150 3 10 4 7 5 5200 4 11 5 8 6 6250 5 13 6 10 7 8a) Suppose the firm is operating in a high-wage country, where capital cost is $100 per unit per day and labour cost is $80 per worker per day. For each level of output, which technology is the cheapest?b) Now suppose the firm is operating in a low-wage country, where capital cost is $100 per unit per day and labour cost is $40 per worker per day. For each level of output, which technology is the cheapest?c) Suppose the firm moves from a high-wage to a low-wage country but that its level of output remains constant at 200 units per day. How will its total employment change?
Using the information given in Table 5.2 (page 136), draw the isoquant correspond- ing to an output level of 20. Starting from L = 4 and K = 1, how much extra capital is needed to keep output constant if the labor is reduced by one unit to L = 3? How much extra capital is needed to keep output constant if the labor is reduced by one unit to L = 2 Table 5.2 Capital K L 1 2 3 4 5 6 1 10 14 17 20 22 24 2 14 20 24 28 32 35 3 17 24 30 35 39 42 4 20 28 35 40 45 49 5 22 32 39 45 50 55 6 24 35 42 49 55 60 Capital K is on the first column, and Labor L is on the first row.
15. A firm can use three different production technologies, withcapital and labor requirements at each level of output as follows:TECHNOLOGY 1 TECHNOLOGY 2 TECHNOLOGY 3DailyOutputK L K L K L100 3 7 4 5 5 4150 3 10 4 7 5 5200 4 11 5 8 6 6250 5 13 6 10 7 8a. Suppose the firm is operating in a high-wage country, wherecapital cost is $100 per unit per day and labor cost is $80 perworker per day. For each level of output, which technologyis cheapest?b. Now suppose the firm is operating in a low-wage country,where capital cost is $100 per unit per day but labor cost isonly $40 per unit per day. For each level of output, whichtechnology is cheapest?c. Suppose the firm moves from a high-wage to a low-wagecountry but its level of output remains constant at 200 units
If 15 workers produce 100 license plates, 16 workers produce 120 license plates, and 17 workers produce 130-license plates, then O diminishing marginal returns have not set in because the marginal product is positive O the marginal product of the seventeenth worker is 130 O diminishing marginal returns must begin with the sixteenth worker O the marginal product of the sixteenth worker is greater than the marginal product of the seventeenth worker O the marginal product of the fifteenth worker must be 20
Using the information given in the table, draw the isoquant corresponding to an output level of 135. Starting from L=6 and K= 2, how much extra capital is needed to keep output constant if the labor is reduced from L = 6 to L= 3? How much extra capital is 8- needed to keep output constant if labor is increased from L=3 to L= 4? 7- 6- 3 85 K 2 70 95 110 120 130 135 5- 50 70 85 100 110 120 100 120 135 150 160 165 120 110 130 110 125 135 145 150 135 145 150 160 165 170 175 175 180 4 3- 2- Using the four-point curved line drawing tool, graph the firm's isoquant for an output level of 135. Label this 'q = 135. 1- 0- Carefully follow the instructions above, and only draw the required object. L, Labor of -00 K, Capital
Assume that Economyland’s production function is Y = F (K, L) = K 0.5 L 0.5Where Y is output level, K is the amount of capital input, and L is the amount of laborinput. a) What is the per-worker production function, y= f (k) for Economyland? b) Assume that 10 percent of capital depreciates each year and savings rate is 20 percent,find the steady-state level of capital per worker for Economyland. Then find the steady-state levelof income per worker and steady-state level of consumption per worker. c) Is it possible to save too much? Why?
With the Cobb-Douglas production function Y=zK1/4nd3/4, if both capital and labour increase by 20%, what will happen to output? O Output will increase by exactly 20% O Since the average value of the exponents in the production function is 1/2, output will only increase by 10%. Because the production function exhibits diminishing returns, output will increase by less than 20%.
The fact that the production function has constant elasticity of scale means that O If we get 10% more workers, output goes up by 10% O If we get 10% more workers, 10% more physical capital, 10% more human capital, and 10% more natural resources, output goes up by 10% O Output always goes up by 10% O Output always goes up by less than 10% Olt is impossible to determine how much output will go up without measuring the amount of elastic produced in a particular economy.
MCQ 45 Suppose the production function exhibits constant returns to scale, with diminishing marginal productivities for both capital and labour. For this function, we would expect a fall in employment and an increase in the capital stock to generate: A a fall in the marginal product of labour and a fall in the marginal product of capital I do not want to answer this question. a fall in the marginal product of labour, but the change in the marginal product of capital can't be determined from the information provided D a rise in the marginal product of labour and a fall in the marginal product of capital E a rise in the marginal product of labour and a rise in the marginal product of capital F a fall in the marginal product of labour and a rise in the marginal product of capital
6:20 PM | 0.4KB/s D O 3. Suppose that the production function is Q- L07%K©25, a) What is the average product of labor holding capital K fixed. b) What is marginal product of labor? c) What is marginal product of capital? d) What is MRTS? VX
If, by increasing the qulf, by increasing the quantity of labour used by one unit, the firm can give up 2 units of capital and still produce the same output, then the MRTSLK is: antity of labour used by one unit, the firm can give up 2 units of capital and still produce the same output, then the MRTSLK is: O 4 O 1 O 2 O 0.5
A firm can use three different production technologies, with capital and labor requirements at each level of output as follows: Technology 1 Technology 2 Technology 3 Daily Output 100 150 200 250 K 6 6 7 8 L 10 13 14 16 K 7 789 L 8 10 11 13 K 8 8 9 10 L 7 8 9 11 Suppose the firm is operating in a high-wage country, where capital cost is $110 per unit per day and labor cost is $90 per worker per day. For each level of output, which technology is cheapest? At 100 units of output, is the least expensive.