UNCWilmington
ECN 321
Department of Economics and Finance
Dr. Chris Dumas
Homework 6
(Due Tuesday, November 11)
1) Suppose that a firm produces a single product Q using inputs L and K.
Suppose that Q
can be produced with either L or K alone, or with some combination of the two. Suppose
each L produces 4 units of Q, and suppose each K produces (1/2) unit of Q.
If P
Q
= $8,
P
K
= $3 and P
L
= $2, what should the firm do to maximize profits?
2)
Suppose that a firm produces a single product Q using inputs L and K.
Suppose that
the firm needs both L and K to produce Q, and L and K must be used in fixed
proportions.
Suppose the firm can produce 1 unit of Q for each 8 units of L used in
production, and suppose that 4 units of K must be used with each unit of L.
If P
Q
=
$100, P
K
= $2.5 and P
L
= $8, what should the firm do to maximize profits?
3) Suppose a firm is producing a single product, Q, using two inputs, L and K.
The price
of Q is P
Q
per unit, the price of L is P
L
per unit, and the price of K is P
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This note was uploaded on 10/22/2009 for the course ECN 321 taught by Professor Dumas during the Fall '08 term at University of North Carolina Wilmington.
 Fall '08
 Dumas
 Economics, Microeconomics

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