Posted by **Anonymous** on Monday, November 2, 2009 at 6:56pm.

2) Earl’s production function is f(x1, x2) = x1^(1/2) * x2^(1/3), where x1 is the number of pounds of lemons he uses and x2 is the number of hours he spends squeezing them. His cost function is c(w1, w2, y) = 2w1^(1/2) * w2^(1/2) * y^(3/2), where w1 is the cost per pound, w2 is the wage rate, and y is the number of units of lemonade produced.

a) If lemons cost $1 per pound, the wage rate is $1 per hour, and the price of lemonade is p, find Earl’s marginal cost function and his supply function. If lemons cost $4 per pound and the wage rate is $9 per hour, what will be his supply function be?

b) In general, Earl’s marginal cost depends on the price of lemons and the wage rate. At prices w1 for lemons and w2 for labour, what is his marginal cost when he is producing y units of lemonade? The amount that Earl will supply depends on the three variables, p, w1, w2. As a function of these three variables, what is Earl’s supply?

----

my answers:

2)

a)

MC(y) = 3y^(1/2)

S(p) = p^2/3

S(p) = p^2/18

b)

MC(w1, w2, y) = 3w1^(1/2) * w2^(1/2) * y^(1/2)

S (p, w1, w2) = p^2 / (3 w1 * w2)

## Answer This Question

## Related Questions

- Economics - Earl’s production function is f(x1, x2) = x1^(1/2) * x2^(1/3), where...
- ECONOMICS - Perfect Competition - Please check and correct my answers. Thank you...
- Math - The table shows the number of lemons needed to make different numbers of ...
- Math - Jeremy uses the linear function G=12h+50 to represent the grade, G (in ...
- PRE*******ALGEBRA - WRITE A FUNCTION RULE TO DESCRIBE EACH SITUATION. PLEASE ...
- Managerial Economics - I'm not sure I have the formulas correct for this problem...
- Pre-Calc - The number of pounds of apples a cannery can produce and the ...
- economics - The production function for our Production is Q = 25L - 0.05L^2; ...
- Math- Algebra - The function C(x)=4x+850 closely approximates the cost of daily ...
- Precalculus II - 1. The number of hours of daylight D(t) in Halifax at day t can...

More Related Questions