7) What are the major issues that must be considered in measuring inputs for regression analysis of production functions? 8) What does the expansion path represent? 9) Q = K1/2L1/2 w = $2 r = $2 The firm would like to know the minimum cost of producing 2000 units of output. Find the combination of inputs that minimizes the cost of producing 2000 units the total cost and identify the expansion path. 10) Q = K1/2L1/2 w = $2 r = $2 The firm would like to know the maximum output that can be produced for $8 000. Find the combination of inputs that maximizes output for a cost of $8 000 the amount of output that can be produced and identify the expansion path. 11) If the price of capital is $24 the price of labor is $15 and the marginal product of capital is 16 the least costly combination of capital and labor requires that the marginal product of labor be ________. 12) If a production function is given by the equation: Q = 12X 10X2 – X3 where Q = Output and X = Input then calculate the equations for a. average product b. marginal product c. point of diminishing average returns d. point of diminishing marginal returns 13) Given the Production Function: Q = 72X 15X2 – X3 where Q = Output and X = Input a. What is the Marginal Product (MP) when X = 8? b. What is the Average Product (AP) when X = 6? c. At what value of X will Q be at its maximum? d. At what value of X will Diminishing Returns set in?
