test2 Answers - Name Student No Ar,tSwERs Economi cs 2296...

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Unformatted text preview: Name: Student No: Ar,tSwERs Economi cs 2296: Test #2 Time allowed: 80 minutes Total marks: 30 marks April 8, 2010 Answer the following questions in the space provided. Tum off all cell phones or anything else that might beep. Simple calculators are only. Explain vour answers and show vour work. Ouestion 1 (4 marks) The production function for earthquake detectors (Q) is given as follows: Q : 4110 s10 -s where K is the amount of capital employed and L is the amount of labor employed. The price of capital, P6, is \$18 and the price of labor, w, is \$2. Suppose the firm produces 60 earthquake detectors. In the long-run, how much labour will be used to minimize the cost of 60 earthquake detectors? MP" 11- ka f.y" ST- Ll,r r-l ta- q I rw, e k"'ll" o{t}4s- k L 60 =Q = ,l k'/-L'/o : +LYL/"'\L 9!slro[2 (2 marks) ;?:'fl[ \$:fffItlf #JhTn total cost schedure. carcurate the average variabre cost (AVc) TV<.3 14rc ZoL-. tao = 7Ye :*7-t a /aZ = /az z 2i.-3-' Question 3 (4 marks) suppose you are given ihe forowing information about a particurar industry: eD = 3300 _ 200p Market demand C(q) = 50 + 0.sq + 0.0gq2 A firm,s cost function Initia'y there are 32 firms....
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test2 Answers - Name Student No Ar,tSwERs Economi cs 2296...

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