Homework Help: Economics

Posted by Anonymous on Tuesday, November 3, 2009 at 7:48am.

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:

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)

Economics - economyst, Tuesday, November 3, 2009 at 5:58pm
a-1) I agree
a-2) I agree, except I would express it here on Jiskha as (p^2)/3

a-3) I get S(p) = (p^2)/36. Check my work.

for b-2, shouldnt it be: (p^2)/(3*(w1^.5)*(w2^.5) ??

Answer this Question

Related Questions

Calculus (Urgent!!) - Hello everyone, I need help with the following problems. ...
Economics - 2) Earl’s production function is f(x1, x2) = x1^(1/2) * x2^(1/3...
Calculus - Find the partial derivative y with respect to s for the following ...
art - two vectors x1 = (20 m) x and x2 (15 m) x, compute and show graphically (a...
intro to probability - In a study of particulate pollution in air samples over a...
ECON - PLEASE CHECK AND CORRECT MY ANSWERS!!!! MRTS = marginal rate of technical...
Math - Which of the following are linear equations in x1, x2 and x3? (a) x1 + ...
ECONOMICS - Perfect Competition - Please check and correct my answers. Thank you...
Reply to grant about a regression problem - This is a reply to the question ...
college - Which of the following choices is a solution for: (-3-i)x1 + (1-2i)x2...

For Further Reading

First Name:
School Subject:
Answer: