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Not sure why x1 and x2 are equated to y in this question 4. lrma's Handicrafts produces plastic deer for lawn ornaments. Its hard work,
Not sure why x1 and x2 are equated to y in this question
4. lrma's Handicrafts produces plastic deer for lawn ornaments. \"Its hard work,\" says Irma, \"but anything to make a buck.\" Her production function is given by f(5c1,$2) = (min{a:1, 2w2}) %, where L131 is the amount of plastic used, 332 is the amount of labor used, and f (551,32) is the number of lawn ornaments produced. Let wl be the price per unit of plastic and wg be the wage per unit of labor. (a) What is Irma's total cost function? Answer The production function uses complementary technology. We know the cost-minimizing input 1 combination uses the inputs in a xed proportion, specically: 3315 = (2m)? Therefore, Irma's input demand functions are: H! ac y2 1/3 2 .'L' [05(- || Plug Irma's input demand functions into the budget constraint to get her total cost function: TOW) 7.0le + 1023:; 2 any2 + 102% w (w + 32) ifStep by Step Solution
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