University of California, Davis Department of Agricultural and Resource Economics ARE 100B Winter 2010 Dr. Larson Problem Set 6 Due Thursday, February 25 at the beginning of lecture Be sure to explain what you are doing and show your work in the numerical problems, and provide a brief but complete answer to the discussion questions. Each part of a problem is weighted equally. Be sure to express the appropriate units for your answers. You should draw graphs for each problem to help guide your analysis. 1. Consider a firm that uses a single variable input, x, to produce output q, with production function q3 l n ( x1 ) . œ† (a) Derive the firm's inverse demand (or willingness to pay) for the input x (which will depend on the output price p and the level of x).(b) From the inverse demand, express the firm's direct demand for x as a function of p and w.
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This note was uploaded on 04/20/2010 for the course ARE 100B 100B taught by Professor Larson during the Winter '10 term at UC Davis.