4:34 D*3 all 100% I2.3 When the inputs price ratio (slope of cost line) is greater than the MRTS,(MPK/PK > MPL/PL) the producer should use .. to minimize the cost.A More labarC Mare labor and more capitalB More CapitalD| None of the above4 The optimal production methodA maximizes output regardiess of costC minimizes the normal rate of returnB| maximizes inputs.Dminimizes cost5. Refer to the information provided in the following figure, If this firm's cost of labor is$10 per unit, and the isocost line represents a total cost 2000. How much is the cost ofcapital per unit?100q-300-200-100200Units of laborLinits of capital

“Since you have asked multiple questions, we will solve the first question for you. If you want any…

3 When the inputs price ratio (sliope of cost line) is greater than the MRTS, (MPK/PK > MPL/PL) the producer should use ... to minimize the cost. A More labor C| More labor and more capital B| More Capital DNone of the above

3 When the inputs price ratio (sliope of cost line) is greater than the MRTS, (MPK/PK > MPL/PL) the producer should use ... to minimize the cost. A More labor C| More labor and more capital B| More Capital DNone of the above

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

100%

4:34 D
*3 all 100% I
2.
3 When the inputs price ratio (slope of cost line) is greater than the MRTS,
(MPK/PK > MPL/PL) the producer should use .. to minimize the cost.
A More labar
C Mare labor and more capital
B More Capital
D| None of the above
4 The optimal production method
A maximizes output regardiess of cost
C minimizes the normal rate of return
B| maximizes inputs.
Dminimizes cost
5. Refer to the information provided in the following figure, If this firm's cost of labor is
$10 per unit, and the isocost line represents a total cost 2000. How much is the cost of
capital per unit?
100
q-300
-200
-100
200
Units of labor
Linits of capital

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