A firms product function is Q=5L^0.5K^0.5. Labor costs $40 per unit (Pl=$40) and capital costs $10 per unit (Pk=$10). K=16 in the short run.
5. Determine the firms short run cost function
A. C=160+2Q^2
B. C= 640+Q^2/20
C. C= 160+Q^2/10
D. C= 640+q^2/10
6. Determine the level of output that minimizes SAC for the firm.
A. 40
B. 80
C. 113
D. 135
7. If K is not fixed, determine the lease cost combination of L and K to produce 1000units of Q
A. L=100, K=400
B. L=100, K=25
C. L=200, K=200
D. L=400, K=100
8. Derive the long-run cost function for the firm.
A. C=4q
B. C=17q
C. C=8q
D. C=10q
9. Suppose the production of a firm is Q=5+2K+L. Which of the following statements is correct?
A. The firms productions exhibits constant returns to scale.
B. The firms production exhibits increasing returns to scale.
C. The firms production exhibits decreasing returns to scale.
D. The firms production exhibits first increasing returns to scale and then decreasing to returns to scale.
10. Suppose the production function of a firm is Q=5+2K+L. Which of the following statements is correct.
A. the firms LAC is increasing as the firm expands Q in the long run.
B. The firms LAC is decreasing as the firm expands Q in the long run.
C. The firms LAC is constant as the firm expands Q in the long run.
D. The firms LAC is first decreasing and then increasing as the firm expands Q in the long run.
A firms product function is Q=5L^0.5K^0.5. Labor costs $40 per unit (Pl=$40) and capital costs $10 per unit (Pk=$10). K=16 in the short run.
5. Determine the firms short run cost function
A. C=160+2Q^2
B. C= 640+Q^2/20
C. C= 160+Q^2/10
D. C= 640+q^2/10
6. Determine the level of output that minimizes SAC for the firm.
A. 40
B. 80
C. 113
D. 135
7. If K is not fixed, determine the lease cost combination of L and K to produce 1000units of Q
A. L=100, K=400
B. L=100, K=25
C. L=200, K=200
D. L=400, K=100
8. Derive the long-run cost function for the firm.
A. C=4q
B. C=17q
C. C=8q
D. C=10q
9. Suppose the production of a firm is Q=5+2K+L. Which of the following statements is correct?
A. The firms productions exhibits constant returns to scale.
B. The firms production exhibits increasing returns to scale.
C. The firms production exhibits decreasing returns to scale.
D. The firms production exhibits first increasing returns to scale and then decreasing to returns to scale.
10. Suppose the production function of a firm is Q=5+2K+L. Which of the following statements is correct.
A. the firms LAC is increasing as the firm expands Q in the long run.
B. The firms LAC is decreasing as the firm expands Q in the long run.
C. The firms LAC is constant as the firm expands Q in the long run.
D. The firms LAC is first decreasing and then increasing as the firm expands Q in the long run.
