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# Order the answer to: Suppose the production of electricity requires just two inputs, capital

Posted By George smith

Question
Suppose the production of electricity requires just two inputs, capital and labor, and that the production function is Cobb-Douglas. Now consider the isoquants corresponding to three different levels of output: Q = 100,000 kilowatt-hours, Q = 200,000 kilowatt-hours, and Q = 400,000

# Order the answer to: What is the elasticity of substitution? What does it tell

Posted By George smith

Question
What is the elasticity of substitution? What does it tell us?

Subject

# Order the answer to: Why would a firm that seeks to minimize its expenditures

Posted By George smith

Question
Why would a firm that seeks to minimize its expenditures on inputs not want to operate on the uneconomic portion of an isoquant?

Subject

# Order the answer to: Could the isoquants corresponding to two different levels of output

Posted By George smith

Question
Could the isoquants corresponding to two different levels of output ever cross?

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# Order the answer to: Why must an isoquant be downward sloping when both labor

Posted By George smith

Question
Why must an isoquant be downward sloping when both labor and capital have positive marginal products?

Subject

# Order the answer to: What is the difference between diminishing total returns to an

Posted By George smith

Question
What is the difference between diminishing total returns to an input and diminishing marginal returns to an input? Can a total product function exhibit diminishing marginal returns but not diminishing total returns?

Subject

# Order the answer to: What is the difference between average product and marginal product?

Posted By George smith

Question
What is the difference between average product and marginal product? Can you sketch a total product function such that the average and marginal product functions coincide with each other?

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# Order the answer to: Suppose a total product function has the traditional shape shown

Posted By George smith

Question
Suppose a total product function has the “traditional shape” shown in Figure 6.2. Sketch the shape of the corresponding labor requirements function (with quantity of output on the horizontal axis and quantity of labor on the vertical axis).

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# Order the answer to: Rick purchases two goods, food and clothing. He has a

Posted By George smith

Question
Rick purchases two goods, food and clothing. He has a diminishing marginal rate of substitution of food for clothing. Let x denote the amount of food consumed and y the amount of clothing. Suppose the price of food increases from Px1 to

# Order the answer to: David has a quasi-linear utility function of the form U(x,

Posted By George smith

Question
David has a quasi-linear utility function of the form U(x, y) = ?x + y, with associated marginal utility functions MUx = 1/(2?x) and MUy = 1.
a) Derive David’s demand curve for x as a function of the prices, Px