This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: 1 , w 2 . Group Problem 2 Output = y = f(x 1 , x 2 ) = [min{x 1 , 2x 2 }] ½ • Plot an isoquant for y = 4 and one for y = 5. • Plot an isocost curve when w 1 = w 2 = 1 that intersects the 4 isoquant at the cheapest combination and one for the 5 isoquant that does the same. • Label the cost minimizing input bundles to produce 4 and 5 units of output. Draw a line connecting the origin with the two cost minimization solutions. What is the slope of this line? • Derive the cost function as a function of y, w 1 , w 2 . Group Problem 3 • If the quantity of input x 2 is fixed in the short run and we have production function a)How much x 1 is needed to produce 100 units of output? b)If w 1 = w 2 = 1, how much does this cost? c)Write down a formula for the cost as a function of output, y . 2 1 2 1 2 ) , ( x x x x f y + = =...
View
Full
Document
This note was uploaded on 06/16/2011 for the course ECON 321 taught by Professor Murray during the Spring '11 term at South Carolina.
 Spring '11
 MURRAY

Click to edit the document details