3. Consider a dynamic (two-period) representative firm's problem. This representative firm is given K unit of capital to produce in the current period. Firm can choose (current-period and future-period) labor demands and investment (to adjust future- period's capital stock) to maximize its present-value lifetime profit. Given that the market interest rate is r and the capital depreciation rate is & after production in each period. Let's further assume that this firm sells all the capital after future-period production. (a) Clearly definite the profit functions for both periods and write down this repre- sentative firm's problem. (b) Write down the optimal condition on investment. Intuitively explain the optimal condition. (c) Suppose K increases, graph the change of investment curve. Intuitively explain the changes on the graph you just drew.
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- Siam Manufacturing has implemented several programs to improve its productivity. President and producer of Thai tea instant, has been able, with his current equipment, to produce 12,500 units this year and 10,500 units for last year. In this year, their product requires 13,200 labor hours, utilities of S8,250, and capital of $88,000 to process. For last year, their product requires 12,000 labor hours, utilities of $7,600, and capital of $83,000 to process. They have asked you to evaluate the firm's productivity by comparing this year's performance with last year's. Last year This YearOutput 10,500 units 12,500 unitsLabor hours 12,000 13,2000Utilities $7,600 $8,250Capital $83,000 $88,000what is the multi-factor percent change this year vs last year100-There are multiple stages in a business life cycle. Sometimes they generate higher return while sometimes they face losses due to some unexpected events like COVID-19. Accounting literature comes forward in support of business in the form of transferring amounts across the years to fil this gap for the moment. There is no doubt that this will be showing a very glowing picture from the business side but it can also be a. Misleading as the investor thinks very positive which is not true b. None of the options c. Better as the investor is expecting a positive return in the future perspective d. Leading to higher share price in the open market resulting in good corporate image2.6 Isabel runs her family's small pineapple processing plant, which takes fresh pineapples and cuts them into pine- apple rings, spears, and chunks. The capital stock of the firm consists of three machines of various vintages, each of which can the pineapples into any of the three different forms. All of the machines are in excellent condi- process tion, and all machines can be running at the same time. Cost of Processing per Pineapple Maximum Total Capacity (Pineapples) per Day Machine 1 $ 0.10 250 Machine 2 0.25 400 Machine 3 0.50 500 a. Assume that “cost of processing" includes all labor and materials, including the owner's wages. Assume further that Isabel's family signed a long-term contract (20 years) with a service company to keep the machines in good repair for a fixed fee of $1,825 per year, or $5 per day. (1) Derive the firm's marginal cost curve. (2) Derive the firm's total cost curve. b. At a price of $0.40, how many pineapples would the company process? What would total…
- QUI The figure below depicts the production function of grain for farmers under average growing conditions with the currently available Noi technology. Mar 9007 PF 800- 700- 600- 500- 400- 300- 200어 100- o Slope 732,000/ 1,600 = 458 04 400 800 1200 1600 2000 2400 2800 Number of farmers Select one or more: In a year with exceptionally good weather conditions, the production function curve will be higher and parallel to the curve O a. above. O b. A discovery of new high yielding crop seeds would tilt the production function curve higher anti-clockwise, pivoted at the origin. O C. In a year of bad drought the production curve can turn downwards for large numbers of farmers. O d. If there is an upper-limit on the amount of grain that can be produced, then the curve will end up horizontal for large number of farmers. S Type here to search 25 hp t4 15 16 eSC 5 6. 7. 00 %24 3. . ........ Kilogrammes of grain produced (thousands)2. For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. Not all graph have to be used and a graph can be used more than once. Graph 1 Graph 2 Graph 3 ° Activity Base O Activity Base o Activity Base Graph 4 Graph 5 O Activity Base O Activity Base FIGURE 20.2 Rent of warehouse of $10,000 per month Per-unit straight line depreciation costs a. b. с. Per-unit cost of direct materials d. Electricity costs of $5,000 per month plus $.0004 per kilawatt-hour е. Total direct labor costmatics for Business and Econ ourse Matheriatics for Businesss and Ecoromics(1) Given demandtincbion P-90.30) OFnd P. at O
- 1. Suppose Firm A has a budget of P1.5 million pesos in outsourcinginputs, labor and machines, that would lend support in its 1 yearoperation. Suppose further that the cost of labor for 1 year is P150,000and for a machine is P200,000. If it decides to hire 6 laborers, howmany machines would it accept?The teohnically efficient combination of two products a business oän produco in the current period given its existing resources and teohnology is: LA) The produotion possibilities frontier (b) The marginał rate of product transformation-- (c). The least cost.combination of two products (d) The marginal physical productRemaining Time: 01:34 23 Suppose a fiem's total variable costs are given by TVC(9) -3 g, and it has a fixed cost of 787 of which 507 is avonidatle, We want to find the firm's Bupply Lets finst find the minimum of the average variable and avoidable costa. This will allow us to find the price below which the firm wil not produce. Remember for decisionmaking only the avoidatble fixed cost matter. This occurs are The price at which the firm just breaks even is P= The firm's supply, then is q for PS 国助nd for P> Please give the supply in terms of upper case P and please use fractions.
- ASAPIn the stage of increasing returns, there is a. Abundance of variable factors O b. Abundance of fixed factors O c. Improvement in technology O d.Overuse of the fixed factor1. Direct laborrate: $15.00perhour Production material: $375 per 100 items Factory overhead: 125% of direct labor Packing costs: 75%ofdirectlabor Desiredprofit: 20%oftotalmanufacturing cost use the above information to answer how many units must be sold to achieve a profit of $25,000? [Note that the units sold must account for total production costs (direct and overhead) plus desired profit. 2. A small textile plant was constructed in 2004. The major equipment, costs, and factors are shown below. Estimate the cost to build a new plant in 2014 if the index for this type of equipment has increased at an average rate of 12% per year for the past 10 years. Show work and Select the closest answer. a) $4,618,000 b) $10,623,000 c) $14,342,000 d) $ 14,891,000