Author Question: Julia is offered two options of government subsidies: 100 food stamp or 100 cash. If she receives ... (Read 81 times)

humphriesbr@me.com

  • Hero Member
  • *****
  • Posts: 550
Julia is offered two options of government subsidies: 100 food stamp or 100 cash. If she receives 100 cash, she will spend 80 on food.
 
  If equivalent evaluation is measured for the situation when only 100 is available to her, the equivalent evaluation is A) greater than 100.
  B) equal to 100.
  C) less than 100.
  D) Not enough information.

Question 2

Suppose the production function is q = 12 L0.25 K0.75. Determine the long-run capital-to-labor ratio (K/L) if the cost a unit of capital (r) is three times the cost of a unit of labor (w).
 
  What will be an ideal response?



mirabriestensky

  • Sr. Member
  • ****
  • Posts: 325
Answer to Question 1

C

Answer to Question 2

The firm minimizes costs by setting MRTS = w/r. MRTS = MPL/MPK = K/3L = 1/3 = w/r. This firm will set K/L equal to one.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

When intravenous medications are involved in adverse drug events, their harmful effects may occur more rapidly, and be more severe than errors with oral medications. This is due to the direct administration into the bloodstream.

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

Addicts to opiates often avoid treatment because they are afraid of withdrawal. Though unpleasant, with proper management, withdrawal is rarely fatal and passes relatively quickly.

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

For a complete list of videos, visit our video library