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Suppose that the production function for your firm is given by: F (L,K) = L ^1/4 K ^1/2. w=2 and r=4.
A. In the long‐run, how many workers and capital should you hire in order to produce Q units of output?
a. L*=Q, K*=Q
b. L*= Q3, K*= Q3
c. L*= Q3/4, K*= Q3/4
d. L*= Q4/3, K*= Q4/3

B. If the firm has a fixed cost of $100, what is the total cost function and the average variable cost function?
a. TC= 100+6Q4/3; AVC=6Q1/3
b. TC= 100+6Q3/4; AVC=6Q3/4
c. TC= 100+6Q3; AVC=6Q2
d. TC= 100+6Q; AVC=6Q

Sagot :

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