Exam 6: Production Cost: One Variable Input

Let the production be f(x,y)= x^1/2y^1/2. If the price of x is 8 and the price of y is 16, in what proportions should the firm use x and y if it wants to maximize profits?

Figure 6A -Which level of the variable input in Figure 6A will a firm choose if it wishes to maximize output?

Advertising costs are:

Some commentators have suggested that the devastating earthquake and tsunami that occurred in Japan on March 11, 2011 will be beneficial to the Japanese economy because the rebuilding process will add significantly to GDP. Evaluate this argument.

Let the production function be f(L)=6L^2/3. Suppose that the cost per unit of labor is 8 and the price of output is 8, how many units of labour will the firm hire?

Economists might consider the cash for clunkers program a failure because it

Which of the following is true? Average product:

Suppose that a particular good, y, is produced according to the following production function y = min(ax₁,bx₂)where x₁ and x₂ are inputs, and a and b are positive constants. Suppose further that x₁/x₂ currently equals b/a. Then:

If MC in plant 1 is 5 and MC in plant 2 is 4, a firm wanting to produce two units should:

The marginal and average cost of commuting by car are:

The only variable input a janitorial services firm uses to clean offices is workers who are paid a wage, w, of $8 an hour. Each worker can clean four offices in an hour. Use math to determine the variable cost, the average variable cost, and the marginal cost of cleaning one more office. Draw a diagram to show the variable cost, average variable cost, and marginal cost curves.

Sunk costs are irrelevant to economic decisions because:

A firm produced widgets in two plants. In the first plant its total cost is TC₁ = y₁² + 20y₁ + 4 and in the second TC₂ = 40y₂ + 24.. i)What is the marginal product in plant 1? What about plant 2? ii)If the firm wants to produce 100 widgets, how should the production be allocated between the two plants.

The short run is the amount of time such that:

Slaves in the deep South typically ate better than free whites because

Given the production function y = min (z₁- 2, z₂ - 4), the efficient number of units of output when there are 20 units of z₁ and 30 units of z₂ available is

A technically efficient technology is one that:

Which assumption guarantees that the marginal product will never be negative even when the second derivative of the production function is negative?

The variable cost function and the total product function are:

If STC = q²- q + 3, then: