How much capital and labor should be used to minimize cost

Assignment Help Econometrics
Reference no: EM13186605

The manager of a cheese-packing plant can use either people (labor) or cheese knivess (capital) to prepare packages of gouda. Based on estimates provided by an efficiency expert, the firm's production function for gouda is given by Q = 2K + L (MPK = 2, MPL =1)

a. If the price of labor is $2 per hour and the rental price of capital is $3 per hour, how much capital and labor should be used to minimize the cost of producing 10 units of output?

b. If the price of capital increases to $4 per hour, how does your answer in part a. changes?

Reference no: EM13186605

Questions Cloud

What is a mathematical model : What is a mathematical model? Explain in your own words. What are some examples of mathematical models that we can use when working with quadratic functions?
Credibility of a qualitative measurement : Why is it appropriate to use some surrogate measures as part of a Goal/Question/Metrics measurement program? Give and defend at least two reasons.
Which site is best for an extraction period : The federal government is considering three sites for mineral extraction in the national wildlife preserve. The cash flow ($ million) associated with each site are given below Initial cost Annual cost Annual benefits Annual dis-benefits Site A 50 3 2..
How much capital and labor should be used to minimize cost : The manager of a cheese-packing plant can use either people (labor) or cheese knivess (capital) to prepare packages of gouda. Based on estimates provided by an efficiency expert, the firm's production function for gouda is given by Q = 2K + L (MPK..
Create a multi-view program for the iphone : Compress the entire XCode project folder as a single zip, rar or other file format using an "archive file" or compression utility like PKZIP.
Find the volume of the resulting solid : A ball of radius 12 has a round hole of radius 5 drilled on an axis through its center. Find the volume of the resulting solid.
Find the number of hits for each player : two minor league baseball players got a total of 366 hits washington had 4 more hits than sanchez. find the number of hits for each player.
Determine the cooling constant k : A hot metal bar is submerged in a large reservoir of water whose temperature is 60 degrees F. The temperature of the bar 20s after submersion is 100 degrees F. After 1 minute, the temp has cooled to 80 degrees F.

Reviews

Write a Review

Econometrics Questions & Answers

  Determine equations to find pw of each machine

Determine the proper equations to find PW of each machine. The cost of money is 10% per year. Machine X         Machine Y Initial cost, $   -55,000  -46,000 Annual cost, $/year   -10,000 -15,000

  Determine the total and marginal revenue functions

What output, price, and profit levels would prevail following expiration of the company's monopoly franchise assuming that vigorous competition evolves between the local cable TV company, voIP firms, and Big Phone, Inc. Assume that a long-run perf..

  Calculate the proportion defective

To construct a p-chart for a manufacturing process, 25 samples of size 200 were drawn from the process. The number of defectives in each sample is listed below. a. Calculate the proportion defective in each sample. and b. Calculate the plot p-ba..

  Estimate for the true daily weight gain

Agri-Beef Inc. operates cattle feed lots in several midwestern states. The company wishes to estimate the average daily weight gain of cattle on their lots. To do this a simple random sample of cattle is taken and the daily weight gain is recorde..

  Determine theexpected economic profit per unit

Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all thre..

  Calculate the net private benefits of the project

Calculate the net private benefits of the project to the foreign-owned company, as a net present value and calculate the net social benefits of the project from the viewpoint of the Australian economy, with the same criterion.

  Interpreting regression results

How do you interpret the effect of immigrant status on wages when the model is Log wages regressed on immigrant dummy, and an immigrant dummy interaction

  Determine the total tax

Suppose the demand for a product is given by P = 40 - 4Q. Also, the supply is given by P = 10 + Q. If a $10 per-unit excise tax is lecied on the buyers of a good, then after the tax buyers will pay how much for each unit of the good.

  Calculate the price index

suppose in 2010, the cost of a market basket of goods was $2001. In 2012, the cost fo the same amrket basket of goods was $2,105. Calculate the price index for 2012, using the price index formula, asume 2010 is the base year________

  When the mother of the granddaughter is the top

the daughter of a women with the income in the bottom third of the income distribution will herself have a 60% chance of being in the bottom third, a 25% chance of being in the middle third, and a 15% chance of being in the top third. Income Group..

  Compute nominal gdp in each year

Suppose the following data describe output in two different years. Item Year 1 Year 2 Apples Bicycles Movie Rentals 20,000 @ 25¢ each 700 @ $800 each 6,000@ $1.00 each 30,000 @ 30¢ each 650 @ $900 each 8,000 @ $1.50 each (a) Compute nominal GDP in ..

  Find the maximum likelihood estimator

Suppose that \(X_{1},X_{2},....,X_{n} \) is an i.i.d. random sample, where \(X_{i}\) follows a normal distribution, with mean zero and unknown variance \(\sigma^{2}\) . Find the Maximum Likelihood Estimator of \(\sigm..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd