Quiz 15 Cost Minimization2

Quiz 15 Cost Minimization2 - $16. (b) What is the...

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Shomu Banerjee ECON 201 COST MINIMIZATION #2 Suppose a firm has a production function: y = 2 x 1 + x 2 where y is the output and x 1 and x 2 are inputs. (a) In the graph below, an isoquant for y = 8 is shown. The prices of the inputs are w 1 = $1 and w 2 = $2. Draw the isocost line corresponding to an expenditure of
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Unformatted text preview: $16. (b) What is the cost-minimizing expenditure for y = 8 when w 1 = $1 and w 2 = $2? (c) What is the cost-minimizing expenditure for y = 8 when w 1 = $8 and w 2 = $2? (d) Calculate the cost function c ( w 1 , w 2 , y ). 10 15 5 10 x 2 5 x 1...
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