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What is the general equation for the isoquant corresponding to any level of output Q? Does isoquant exhibit diminishing marginal rate of technical substitution?
Find marginal products of K and L for each pair of inputs in the table. Then, carefully, sketch several of isoquants associated with this production function.
Suppose K = 600. Find the total product function and graph it over the range. At what level does the marginal product curve appear to reach its maximum?
Why would a firm that seeks to minimize its expenditures on inputs not want to operate on the uneconomic portion of an isoquant?
Why can a total product function exhibit diminishing marginal returns but not diminishing total returns?
At the beginning of the year, before the retailer has purchased any printers, what is the opportunity cost of laser printers?
The firm wants to produce 120 gadgets. What are the cost-minimizing input quantities? Illustrate your answer with a clearly labeled graph.
A cost-minimizing firm's production function is given by Q = LK. What would the cost-minimizing input combination be after the price changes?
Suppose that the price of labor equals w and the price of capital equals r. Derive expressions for the input demand curves.
Currently, the firm employs 80 workers per day. What is the firm's daily total cost if it rents just enough capital to produce at its target?
Suppose computer time costs $5 per hour and clerical time costs $7.50 per hour. What are the cost-minimizing choices of L and K?
Find the cost-minimizing combination of labor and capital if the manufacturer wants to produce 121,000 airframes.
Why could these expansion paths ever cross each other at a point other than the origin (L = 0, K = 0)?
Suppose only the cost of labor goes up by 5 percent. What happens to the cost-minimizing quantity of labor and capital in the short run.
A firm uses two inputs, capital and labor, to produce output. What will happen to the cost-minimizing input quantities for a given output level?
Write down a production function with labor. Sketch isoquant that shows combinations of skilled and unskilled labor that result in building 100 yards of wall.
Show how an expansion in the central bank's domestic assets ultimately affects its bal. ante sheet under a fixed exchange rate.
What is the difference between average product and marginal product? Can you sketch a total product function such that average and marginal product function?
Analyze a transitory increase in the foreign interest rate, A. Under which type of exchange rate is there a smaller effect on output-fixed or floating?
Suppose the central bank of a small country is faced by a rise in the world interest rate. R. What is the effect on its foreign reserve holdings?
What are the con-sequences for analyzing the relationship between growth in the world stock of inter-national resents and worldwide inflation?
Would you expect the compensating variation and the equivalent variation resulting from the price decrease to be near $30? Explain.
Draw a set of indifference curves that would make it optimal for him to work 4 hours of overtime each day.
What are the principal sources of government revenues in developing countries? Why are many taxes so difficult to collect? Discuss.
A chemical engineer wishes to set -up special fund by making a uniform semi-annual end- of period deposits. What is the required semi-annual deposit to be made?