Reference no: EM131843259
Problem
Consider a firm that produces output using a Cobb-Douglas combination of capital and labor: Y = KαL1-α, 0 < α>< 1. suppose that the firm's price is fixed in the short run; thus it takes both the price of its product, p, and the quantity, y, as given. input markets are competitive; thus the firm takes the wage, w, and the rental price of capital,>K, as given.
(a) What is the firm's choice of L given P, Y, W, and K?
(b) Given this choice of L, what are profits as a function of P, Y, W, and K?
(c) Find the first-order condition for the profit-maximizing choice of K. Is the second-order condition satisfied?
(d) Solve the first-order condition in part (c) for K as a function of P, Y, W, and rK. How, if at all, do changes in each of these variables affect K?
|
Why some bad news should be given face-to-face
: Discuss why some bad news should be given face-to-face and not by a letter or over the phone.
|
|
Described as involving direct finance
: The most important asset underlying the financial system is: Which of the following can be described as involving direct finance?
|
|
Result in unconsummated transaction
: Consumer values car at 30,000, purchaser values same car at 25,000 what amount of tax would result in unconsummated transaction.
|
|
New zealand future in the global economy
: What do you think about New Zealand's future in the global economy? Use economic theories and terminologies you learned to analyze and explain the question.
|
|
What are profits as a function of p y w and k
: What is the firm's choice of L given P, Y, W, and K? Given this choice of L, what are profits as a function of P, Y, W, and K?
|
|
Incremental cash flow of purchasing instead of leasing
: What is the incremental cash flow of purchasing instead of leasing for Year 3 from the lessee’s perspective?
|
|
Develop a wbs by providing details where the blank lines
: James Lawson has decided to run for a seat as Congressman from the House of Representatives, District 34, in Connecticut.
|
|
Recent difficult economic times have caused an increase
: Recent difficult economic times have caused an increase in the foreclosure rate of home mortgages. Statistics from the Penn Bank
|
|
Supply demand and market equilibrium
: Explain how rent controls causes a shortage and how it related to supply, demand, and market equilibrium.
|