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# five questions Questions for intermediate microeconomic

1. The given table represents the production function for Red Rum Effects, a company that sells
Halloween props. The numbers in the cells represent the number of customers that can be served
with various combinations of labor and capital.

2. Douglas runs a cupcake business. Each week they need to produce 200 cupcakes to ship to their

!.# !.\$
customers. The bakery’s long-run production function is = 10 where Q is the number of

cupcakes produced, K is the quantity of ovens rented, and L is the quantity of labor hired. For this
production function, the = 8 !.#⁄ !.# and the = 2 !.\$⁄ !.\$, weekly wages are \$20

%&

and the weekly rental rate is \$100.

3. Jacqueline owns a cattle ranch with the production function = 10 − 1000 where L is hired
labor hours. Assume that Jacqueline has no fixed costs

. 4.Suppose a firm has the following production function: Q = 2KL The marginal product of capital for
this production function is 2L, and the marginal product of labor is 2K. If capital rents for \$100 per
unit per day, labor can be hired for \$200 per unit per day, and the firm is minimizing costs.

5.Sally has a business: she sells seashells down by the seashore. The long-run total cost of Sally’s Shells

is = 500 − 10 \$ + ‘ where Q is measured as dozens of shells. The long-run marginal

cost of Sally’s Shells is given as = 500 − 20 + 3 \$