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Test+1+Fa+_05

# Test+1+Fa+_05 - Write your real name on the back of the...

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Write your real name on the back of the test below the paperclip. E-Mail: Code Name Here : Write only on the front of the page. Only legible writing will be considered for points. Circle all answers. Read each question very carefully before beginning. Honor code pledge I signify that I have conformed to the Georgia Tech Honor code during this examination. Signature Date

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Assume the production function q = 16K .5 N .25 represents a family farm. In this case, the family owns acres of land (N) that it can farm or rent each year. The rental rate for the land is r. The family can also lease machinery time from the local cooperative equipment shed. The charge for the machine use is v. The family’s harvest in thousands of bushels is represented by q. 1. What is the cost equation of this production function? (7 points) MPk = 8K -. 5 N . 25 MPn = 4K . 5 N -.75 v/r = 2N/K K=2Nr/v N=vK/2r Q=16(2Nr/v)^.5 N^.25 Q=2^4.5 * N^.75 * (r/v)^.5 N^.75 = Q*v^.5 / (2^4.5 * r^.5) N^(3/4)=Q*v^(1/2)/(2^9/2 * r^(1/2)) N* = Q^4/3 * v^ 2/3 / (2^6 * r^2/3) N* = Q^ 4/3 * v^2/3 * 2^-6 * r^-2/3
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Test+1+Fa+_05 - Write your real name on the back of the...

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