# ISI micro ques- sample paper 2013

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## ISI micro ques- sample paper 2013

 sir, my doubt is regarding q 3: A firm is deciding whether to hire a worker for a day at a daily wage of Rs. 20/-. If hired, the worker can work for a maximum of 10 hours during the day. The worker can be used to produce two intermediate inputs, 1 and 2, which can then be combined to produce a final good. If the worker produces only 1, then he can produce 10 units of input 1 in an hour. However, if the worker produces only 2, then he can produce 20 units of input 2 in an hour. Denoting the levels of production of the amount produced of the intermediate goods by k1 and k2 , the production function of the final good is given by √k1k2. Let the final product be sold at the end of the day at a per unit price of Rs. 1/-. Solve for the firms optimal hiring, production and sale decision. I tried solving it by assuming L1 labourers are used in pdtn of input 1 and L2 in input 2. so, k1=10*10*L1 and k2+20*1o*L2 the cost of producing input 1= L1*20, the number of labourers multiplied by the dailly wage. so, per unit cost of producing input 1=L1*20/(10*10*L1)=1/5 And sim for input 2, per unit cost= 1/10. next, i found out the cost functioN:k2/k1=2, k2=2k1, putting it back ik the cobb douglas pdtn fun, k1=Q/sq root(2) k2=Q*sq root(2) and the cost fn= sq root(2)/ 5*Q profit function= Q-sq root(2)/ 5*Q however, this is an increasing function.. so how will we find the optimal values? plz help. thanks in advance.
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## Re: ISI micro ques- sample paper 2013

 getting same problem , please sir tell us where we are wrong
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## Re: ISI micro ques- sample paper 2013

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## Re: ISI micro ques- sample paper 2013

 thank you so much sir.....plz upload other answers as well.... M.A Economics Delhi School of Economics 2013-15 Email Id:sumit.sharmagi@gmail.com
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## Re: ISI micro ques- sample paper 2013

 In reply to this post by Amit Goyal thanks sir