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A firm hires two inputs, input 1 and input 2, to make output. Unfortunately, for every unit of input 1 that the firm hir
Posted: Fri Jul 01, 2022 7:54 am
by answerhappygod
- A Firm Hires Two Inputs Input 1 And Input 2 To Make Output Unfortunately For Every Unit Of Input 1 That The Firm Hir 1 (315.82 KiB) Viewed 37 times
A firm hires two inputs, input 1 and input 2, to make output. Unfortunately, for every unit of input 1 that the firm hires, 1 - a units turn out to be defective, where 1 > 1 − a > 0. That is, only a fraction a of purchased units of input 1 actually contributes to producing output y. Let x₁ and x₂ be the quantities that are not defective and can be employed towards production. If rounding is needed, please round your answers to 3 decimal places. Suppose the firm's production function is such that x₁ and x₂ are perfect substitutes: each unit of output can be made with either one unit of x₁ or units of x2. Suppose 1 = 1 and W₂ = 9. It is optimal for the firm to hire only input 1 (and hire 0 units of input 2) if a ≥_ Suppose the firm's production function is such that x₁ and x₂ are perfect complements: the firm needs 1 unit of x₁ and 4 units of x₂ to make each unit of output. Find the total cost of producing 3 units of output when w₁ = W₂ = 1 and a = = 0.7.