Unformatted text preview: ht‐handed and an economist, he must have an asymmetric value function. C. if you find a left‐handed person and assume you have an economist, you are falling into the representative bias trap. D. if a person is a right‐handed economist, she will be more susceptible to the psychophysics of perception E. Abstain 14 The following information is relevant for Questions 32, 33, 34, 35 and 36. The firm is a price taker for both the input and output markets. Q = K0.4L0.4 P =10 w =1 r = 3 Q = 10 (only for the relevant technique) 32. Assuming that the isoquant is tangent to the budget line, what value of L in terms of K do you get when setting the marginal rate of technical substitution equal to the ratio of the input costs? [Pen. 0] A. L= 3K B. L= (1 / 3)K C. L= (3 / 4)K D. L= (4 / 3)K E. Abstain 33. Use the cost minimisation technique to find the conditional factor demands for this firm: [Pen. 0.5] A. K* = 11.6 and L* = 34.7 B. K* = 12.6 and L* = 37.9 C. K* = 10.3 and L* = 30.8 D. K* = 30.8 and L* = 10.3 E. Abstain 34. Usi...
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- Spring '11
- Microeconomics, representative, E. Abstain