a firm produces according to the function q=l^0.7K^.3, pl= $7 and pk=$3. the fir

ID: 1173255 • Letter: A

Question

a firm produces according to the function q=l^0.7K^.3, pl= $7 and pk=$3. the firm faces demand q=3,600-200p in the long run.

1. determine the least cost between l and k in the long run.

a. k=l

b. k=0.18l

c. k=5.44l

d. k=2.1l

2. determin l and k to produce 1000 units of q in the least cost.

a. l=700 k=300

b. l=3-- k=700

c. l=1,000 k=1000

3. determine the long run cost function for the firm

a. c=1259q

b c= 1399q

c c=10Q

d c= 15q

4. which of the following statement is true

a. the firms production exhibits constant returns to scale

b. the firms production exhobts increasing returns to scale

c the firms productions exhibits decreasing returns to scale

d. the firms production exhibts first increasing returns to scale and then decreasing return to scale

1)d

2)b

3)a

4)b

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