Suppose that a consumer has a Cobb-Douglas utility function U(X,Y)=100X0.4Y0.8 , where X and Y are quantities of goods X and Y consumed, with a budget constraint of PxX + PyY = M, where Px, Py, and M are the price of X, price of Y, and income (money), respectively. Determine the demand functions of goods X and Y,
1. Firm’s cost function shows the relationship between total cost (C) and output (Q). Derive the cost function by minimizing C = 2K + 10L subject to a production function of Q = K0.5L0.3. Does the average cost (AC) increase with output level? Show your work. Is the marginal cost (MC) greater than the average […]