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Econ203 Intermediate Microeconomics

Fall 2022-23 Quiz 4

Each member chooses ONE of five essay questions. Submit answers in groups. The steps of calculation must be shown clearly. Write down your name and student number in each question.

1. The production function for output (Q) is given as Q = K1/2L1/3 where K is the amount of capital employed and L is the amount of labour employed. The price of capital is $8, and the price of labor is $4. Show the input choice when output reaches 49 and find the marginal cost of the 50th unit of output. Show your steps of calculation clearly. (10 marks)

2. The production function for Q is given as Q = 4K1/2L1/2 where K is the amount of capital employed and L is the amount of labor employed. The price of capital is $18, and the price of labor is $2. Show the input choice when output reaches 59 and find the marginal cost of the 60th unit of output. Show your steps of calculation clearly. (10 marks)

3.  The production function for Q is given as Q = 5K1/2L1/2 where K is the amount of capital employed and L is the amount of labor employed. The price of capital is $8 and the price of labor is $4. Show the input choice when output reaches 59 and find the marginal cost of the 60th unit of output. Show your steps of calculation clearly.   (10 marks)

4.  The production function for pianos is given as Q = 4 K^1/4 L^1/2 where Q is the number of pianos produced, K is the amount of capital employed and L is the amount of labour employed. The rental rate of capital is $15 per machine-hour and the price of labour is $60 per hour. Show the input choice when output reaches 99 and find the marginal cost of the 100th unit of output. Show your steps of calculation clearly.   (10 marks)