Home » HW 9 (MO) A rm that uses two inputs to produce output has the production function 3×1/3 y 1/3 , where x is the amount of input 1 and y is the amount…

# HW 9 (MO) A rm that uses two inputs to produce output has the production function 3×1/3 y 1/3 , where x is the amount of input 1 and y is the amount…

10. HW 9 (MO) A rm that uses two inputs to produce output has the production function 3×1/3 y 1/3 , where x is the amount of input 1 and y is the amount of input 2. The price of output is 1 and the prices of the inputs are wx and wy . The rm is constrained by the government to use exactly 1000 units of input 1. How much of input 2 does it use? What is the most that it is willing to bribe an inspector to allow it to use another unit of input 1? 11. HW 10 (MO): A rm that uses two inputs to produce output has the production function 4×1/4 y 3/4 . The price of output is 1 and the price of each input is 1. The rm is constrained to use exactly 1000 units of input x. How much of input y does it use? What is approximately the maximum amount the rm is willing to pay to be allowed to use e more units of input x, for e small?

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