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  3. no copy and pasted answers please please go step by...

Question: no copy and pasted answers please please go step by...

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3 Long-run costs (8 points, 2 Bonus Points) The same Hollywood studio is doing its planning for the next year and can choose capital and labor. (a) What is the isocost line for a budget of $16,000 (in thousands)? What is the equation for the isoquant? Find the slopes of the isoquant and the isocost line:? What condition has to hold so that you minimize costs? (2) (b) Derive the minimized costs as a function of output (the cost function). How many movies can (c) What is the marginal cost of a movie now? How much does it cost on average to produce a (d) Assume that the eurrent capital-labor tatio is K/I 1 Find the marginal rate of technical you afford to produce at the afore-mentioned budget? (2) movie? (2) substitution. How many (marginal) units of capital can you save when you hire an additional (marginal) unit of labor, holding output constant? How much money can you save when you do so?1 (2) (e) Bonus Question. The eurent capital-liabor ratio is stil K/1 If you spend 100 additional (marginal) dollars on hiring more labor, how many additionnl (marginal) units of labor can you hire and how imuch more output can you produce? Answer the same for capital. If you have to stay on the same budget. would you hire or fire workers? (2)

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