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Unformatted text preview: 2. (5) A firm uses two inputs (L and K) to produce output (Q). The production function is Q = L 1/3 K 2/3 . If w l = 2 and w k = 1, then how much will it cost for the firm to produce 20 units of output? 3. (5) A firm’s total cost (as a function of output) can be described with the following equation. TC(Q) = (Q + 2) 2 . Write down an equation for the firm’s: a. Marginal Cost. b. Fixed Cost. c. Variable Cost. d. Average Fixed Cost. 4. (5) True or False. When the marginal cost is increasing, the average variable cost is always increasing. Explain your logic....
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This homework help was uploaded on 01/31/2008 for the course ECON 300 taught by Professor Nonnenmacher during the Spring '08 term at Allegheny.
 Spring '08
 Nonnenmacher
 Economics, Microeconomics

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