18. On a small tropical island, two firms draw onthe same supply of labor and capital. The first_firm produces fish, and in the fishing industrythe marginal product of labor is 8 and the mar-ginal product of capital is 5. The second firmproduces coconut, and in the coconut industrythe marginal product of labor is 64 and the mar-ginal product of capital is 32.a. Show that the allocation of labor and capitalbetween the two industries is inefficient.b. Suggest a reallocation of labor and capital thatwill enable the island to produce more fish andcoconuts without using more resources.

Given:Fishing Industry:Marginal product of labor (MPLF) = 8Marginal product of capital (MPKF) =…

Answered: 18. On a small tropical island, two…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8PA: Jakarta Company is a service firm with current service revenue of $400,000 and a 40% contribution...

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