Exam 6: Producer Behavior

Suppose that a community health center finds that regardless of the number of physicians or nurse practitioners employed, it can always replace one family practice physician by using two additional nurse practitioners without affecting the quantity or quality of patient office visits. This finding implies that:

Use the following to answer question: Figure 6.16 -(Figure 6.16) Consider the production function Q = L^0.5K^0.5, with MP_K = L^0.5/K^0.5 and MP_L = K^0.5/L^0.5.

For the production function Q(K,L) = K^0.5L^0.5, the marginal product of capital is:

For the production function Q(K,L) = K^0.5L^0.5, the marginal rate of technical substitution MRTS_LK is:

Answer the following questions.

Use the following to answer question: Figure 6.6 -(Figure 6.6) Based on the isocost line, the ratio of the wage rate (W) to rental rate of capital (R) is:

Use the following to answer question: Figure 6.2 -(Figure 6.2) Which of the following statements are TRUE?

Suppose that a farmer grows corn. The farmer's production function is Q(K,L) = 5K^0.4L^0.6, where K is the number of harvesters and L is the number of farmworker labor hours. The prevailing wage rate is $8 per hour and the rental rate associated with harvesters is $75. The farmer has a goal of delivering 100,000 bushels of corn to market. What Lagrangian equation can be used to solve the farmer's cost minimization problem?

Use the following to answer questions 21-22: Table 6.3 -(Table 6.3) This table illustrates a _____ production function because capital and labor _____.

A basic assumption of the long run is that a firm:

Use the following to answer question: Figure 6.10 -(Figure 6.10) Which of the following statements is (are) TRUE?

Use the following to answer question: Table 6.4 -(Table 6.4) What is the equation for this firm's production function?

Suppose a firm is producing 2,475 units of output by hiring 50 workers (W = $20 per hour) and 25 units of capital (R = $10 per hour). The marginal product of labor and marginal product of capital are 40 and 25, respectively. Is the firm minimizing the cost of producing 2,475 units of output?

Which of the following statements violates the basic assumptions of isoquants?

A basic assumption of production is that the firm:

The short-run production function for a firm is given by Q = 40L^2/3. What is the average product?

Assume that Chia Pets International has the production function Q = K + 2L. If the price of capital is $50 and the price of labor is $50, graphically determine this company's expansion path.

Suppose the production function for a small plumbing company is: Q = 6KL where Q is the number of water heaters installed, K is the number of machine hours from plumbing supplies, and L is the number of plumbers. a. Suppose that the wage rate is $20 per hour and the rental rate of capital is $30 per hour. If the construction company has a contract to install 100 new water heaters, what is the cost-minimizing bundle of capital and labor? b. Derive the company's expansion path.

Suppose the firm's production function is Q = 2KL, where Q is units of output, K is units of capital (which are fixed at 2), and L is units of labor.

To calculate the firm's expansion path using calculus, we need to solve its: