SectionWS11

# SectionWS11 - Econ 100A Worksheet#11 Cost Functions...

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Econ 100A - Worksheet #11 Cost Functions Exercise 1 Consider a good Q to be produced with inputs Z 1 and Z 2 . A production plan in this case can be written ( z 1 ,z 2 ,q ) where z 1 is the quantity of input 1, z 2 is the quantity of input 2 and q the quantity of output. 1) The technology T is deﬁned by the following production set: E = { (0 , 1 , 0) , (1 , 1 , 2) , (2 , 2 , 3) , (2 , 2 , 4) , (1 , 3 , 1) , (1 , 3 , 4) , (2 , 3 , 5) , (2 , 3 , 3) , (3 , 3 , 4) } . Find the production function related to this technology. 2) Assume the cost of input 1 is w 1 = 2 and the cost of input 2 is w 2 = 4 . a) Find the total cost function for q = { 0 ,..., 5 } . Are there any ﬁxed costs? b) Find the average cost and the average variable cost functions. Exercise 2 For each of the following cost functions Determine whether it is a short run cost function or not, Compute the marginal cost function, the average cost function, the average variable cost function and the average ﬁwed cost function
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