Unformatted text preview: β = $1200 . 00? b. By approximately how much will Jack’s utility increase if his budget increases by $50.00? Explain your answer. 3. The production function for SlugTools Drills, Inc. is P ( K,L ) = 10 K 2 / 5 L 3 / 5 , where P ( K,L ) is the number of drills produced in a year, K is the capital input, and L is the labor input. The cost per unit of capital is $1280, and the cost per unit of labor is $14580. a. Find the levels of labor and capital inputs that minimize the cost of producing 20480 drills. You may assume that the critical point you ﬁnd does in fact yield the minimal cost. b. Find the levels of labor and capital inputs that minimize the cost of producing q drills. Express your answer in terms of q . c. Use your answer to part b. to ﬁnd the marginal cost function for SlugTools. d. Assuming that the ﬁxed cost for SlugTools is C = $100 , 000, ﬁnd their cost function....
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 Spring '10
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 Economics, Optimization, Jack, average price, ucsc Review Questions

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