4. What if the production function for education (E) is: E=T06 B08, where T is teachers and B is buildings and materials. The cost of each teacher is $54, the material cost $144 per unit and the school has a budget of $5,000 (numbers are in ,000, but this can be ignored) a. Construct the isocost equation. b. With a MPT = 0.6T04B0.8 and MPB = 0.8T06B-02, determine the appropriate input mix to get the greatest output. Also, compute output. c. Explain what would happen in the short-run (keeping capital fixed) to the appropriate input mix if the budget where changed to $4,250. Would the input combination be different in the long-run? If so, how would it change? Explain. 4. What if the production function for education (E) is: E=T06 B08, where T is teachers and B is buildings and materials. The cost of each teacher is $54, the material cost $144 per unit and the school has a budget of $5,000 (numbers are in ,000, but this can be ignored) a. Construct the isocost equation. b. With a MPT = 0.6T04B0.8 and MPB = 0.8T06B-02, determine the appropriate input mix to get the greatest output. Also, compute output. c. Explain what would happen in the short-run (keeping capital fixed) to the appropriate input mix if the budget where changed to $4,250. Would the input combination be different in the long-run? If so, how would it change? Explain.
4. What if the production function for education (E) is: E=T06 B08, where T is teachers and B is buildings and materials. The cost of each teacher is $54, the material cost $144 per unit and the school has a budget of $5,000 (numbers are in ,000, but this can be ignored) a. Construct the isocost equation. b. With a MPT = 0.6T04B0.8 and MPB = 0.8T06B-02, determine the appropriate input mix to get the greatest output. Also, compute output. c. Explain what would happen in the short-run (keeping capital fixed) to the appropriate input mix if the budget where changed to $4,250. Would the input combination be different in the long-run? If so, how would it change? Explain. 4. What if the production function for education (E) is: E=T06 B08, where T is teachers and B is buildings and materials. The cost of each teacher is $54, the material cost $144 per unit and the school has a budget of $5,000 (numbers are in ,000, but this can be ignored) a. Construct the isocost equation. b. With a MPT = 0.6T04B0.8 and MPB = 0.8T06B-02, determine the appropriate input mix to get the greatest output. Also, compute output. c. Explain what would happen in the short-run (keeping capital fixed) to the appropriate input mix if the budget where changed to $4,250. Would the input combination be different in the long-run? If so, how would it change? Explain.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section7.A: Appendix: A Closer Look At Production And Cost
Problem 1AQ
Related questions
Question
Transcribed Image Text:4. What if the production function for education (E) is: E=T06 B08, where T is teachers and B is
buildings and materials. The cost of each teacher is $54, the material cost $144 per unit and the
school has a budget of $5,000 (numbers are in ,000, but this can be ignored)
a. Construct the isocost equation.
b. With a MPT = 0.6T04B0.8 and MPB = 0.8T06B-02, determine the appropriate input mix to get
the greatest output. Also, compute output.
c. Explain what would happen in the short-run (keeping capital fixed) to the appropriate input
mix if the budget where changed to $4,250. Would the input combination be different in the
long-run? If so, how would it change? Explain.
Transcribed Image Text:4. What if the production function for education (E) is: E=T06 B08, where T is teachers and B is
buildings and materials. The cost of each teacher is $54, the material cost $144 per unit and the
school has a budget of $5,000 (numbers are in ,000, but this can be ignored)
a. Construct the isocost equation.
b. With a MPT = 0.6T04B0.8 and MPB = 0.8T06B-02, determine the appropriate input mix to get
the greatest output. Also, compute output.
c. Explain what would happen in the short-run (keeping capital fixed) to the appropriate input
mix if the budget where changed to $4,250. Would the input combination be different in the
long-run? If so, how would it change? Explain.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning