Answered step by step
Verified Expert Solution
Question
1 Approved Answer
it be a blessing if you could answer all 4 Questions. Thank you Question 02 Consider the same information in question 02. The government can
it be a blessing if you could answer all 4 Questions. Thank you
Question 02 Consider the same information in question 02. The government can impose different taxes on this firm. Assume the firm sells all units it produces. Which of the following alternatives is correct? (a) A tax of $1 per unit of capital used would make the firm increase K* and reduce L" (b) A tax of $2 per unit of labor used would make the firm increase " and reduce K* (c) A tax of $3 per unit of output sold would make the firm increase both K* and L" (d) A tax of $4 per unit of output sold would not change the firm's optimal input mix (K*, L*)Question (11 A firm produces a single good using capital and labor as inputs. Its production function is o 2 ags) = HEEL]? and the marginal products of capital and labor are a c MPH=CKE. MPL=EI Let r = 55 be the price of one unit of capital. Assume that or = 1.5 = 2, and A = 1+3. Assume also that the firm wants to produce 'q' = 1.25!) units. If the firm is minimizing costs by using the same amounts of capital and labor {K = L}, how much is w, the price of labor? {a} w = $5 {b1 w = $113 {c} w = $15 {d] w = $213 Question 03 A firm produces a single good using capital and labor as inputs. Its production function is o :fft'J} : AKL Let r = $2 he the price of one unit of capital and w = $4 the price of one unit of labor. Assume that the firm wants to produce :7 = 2,:100 units. How do the optimal input mix change when the firm switches to a more productive technology, moving from A : it] to A\" : 412]? la} The mix changes from (KL) : (20,10) to (HHS) : {1&5} [h] The mix changes from {EL} 2 {113.20} to {HIE} = {5,10} [cl The mix changes from [KL]: 2 (113,10) to [K',L\"j = {2B,2] [d] The mix changes from {KL} : (21320) to [K'J'] : {lillj Question (14 Consider the same information in question D3 {same relative prices, production function, and output target}. 1I.I'I.I'hat happens to the total cost of production when the firm switches to a more productive technology, moving from A = 1:] to A' = 4:]? Assume there are no fixed costs. [a} The total production changes from IL" = $213 to C' = 54:] [h] The total production changes from IL" 2 $413 to C' : 520' {c} The total production changes from IL" 2 $413 to ISI 2 SEE] [d] The total production changes from C = $313 to C' = 543Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started