6. Relationship between returns to scale, isoquants, production frontiers, and cost curves The following graph shows two isoquants that represent the firm's production technology. One of the isoquants shows all of the possible combinations of labor and capital that can produce 300 units of output (q = 300), but you must determine the other isoquant's quantity given the information that follows. CAPITAL 100 90 80 70 60 50 S 30 20 10 0 0 10 20 30 40 50 LABOR 60 70 80 19₁ = 300 90 100 ? Suppose the firm's production process exhibits decreasing returns to scale. Based on the graph, the level of output represented by the second isoquant is q₂ =

6. Relationship between returns to scale, isoquants, production frontiers, and cost curves The following graph shows two isoquants that represent the firm's production technology. One of the isoquants shows all of the possible combinations of labor and capital that can produce 300 units of output (q = 300), but you must determine the other isoquant's quantity given the information that follows. CAPITAL 100 90 80 70 60 50 S 30 20 10 0 0 10 20 30 40 50 LABOR 60 70 80 19₁ = 300 90 100 ? Suppose the firm's production process exhibits decreasing returns to scale. Based on the graph, the level of output represented by the second isoquant is q₂ =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7. Relationship between returns to scale, isoquants, production frontiers, and cost curves The following graph shows two isoquants that represent the firm's production technology. One of the isoquants shows all of the possible combinations of labor and capital that can produce 200 units of output (q = 200), but you must determine the other isoquant's quantity given the information that follows. CAPITAL Suppos is q2 = 100 90 80 70 60 50 40 30 20 10 0 350 400 450 0 10 20 30 40 50 LABOR 60 70 80 *9/₂ = ? 19₁ = 200 90 100 ? m's production process exhibits constant returns to scale. Based on the graph, the level of output represented by the second isoquant
The table shows the shows the quantities of labor and capital required to produce various levels of output. Quantity of Capital Quantity of Labor Output 6 2 40 12 4 100 24 8 220 48 16 440 96 32 800 When the firm increases production from 48 units of capital and 16 units of labor to 96 units of capital and 32 units of labor, the production function exhibits: increasing returns to scale. constant returns to scale. diminishing marginal returns. decreasing returns to scale.
4). The Greening of Motels and Hotels ( Hotels and motels that have gone green are using on average 25% less labor than those that have not gone green. Much of going green includes less towels and sheet washing for customers staying multiple nights. a). Show the effect of the change in production for a hotel in the short-ruŋ and in the, Iong-run using appropriate models of the firm. (make sure to include an isoquant graph) b). Explain and graph how "going green" may change their revenues, costs and profits (4
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2.4 Draw the isoquants and find the cost function corresponding to each of the following production functions: Case A : q = ²2 Case B : q=0121 + a₂%2 Case C = q=a1²² +₂²² Case D : q = min 21 (23) 01 01 where q is output, z₁ and 22 are inputs. a1 and as are positive constants. [Hint: think about cases D and B first; make good use of the diagrams to help you find minimum cost.) 1. Explain what the returns to scale are in each of the above cases using the production function and then the cost function. Hint: check the result on page 25 to verify your answers/ 2. Discuss the elasticity of substitution and the conditional demand for inputs in each of the above cases.
Economics students often confuse (a) diminishing returns related to the variable factors of production and (b) diseconomies of scale. Explain the difference between the two and give one example of each.
For each of the following terms, provide a definition, a description of how this line looks on a graph, and any significant relationships between the term in question and other terms on this list. (If A is related to B, you only need to discuss the relationship once!) Average Product of Labor Marginal Product of Labor Average Variable Cost Average Fixed Cost Average Total Cost Marginal Cost
4) Consider a firm that has just built a plant, which cost $2,000. Each worker costs $6.00 per hour. Based on this information, fill in the table below.Consider a firm that has just built a plant, which cost $2,000. Each worker costs $6.00 per hour. Based on this information, fill in the table below. Number of Worker Output Hours 0 50 100 150 200 250 300 350 0 400 900 1300 1600 1800 1900 1950 Marginal Fixed Variable Total Marginal Product Cost Cost Cost Cost Average Variable Cost Average Total Cost -- Consider a firm that has just built a plant, which cost $2,000. Each worker costs $6.00 per hour. Based on this information, fill in the table below.
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d. Using the table below indicate which firm has (i) diseconomies of scale and (ii) constant returns to scale over the entire range of output. Explain your answer Quantity 1 (Units of output ) 2 4 5 7 Firm A 210 340 490 660 850 1060 1290 Firm B 180 350 510 660 800 930 1050 Firm C 120 250 390 540 700 870 1050 Firm D 150 300 450 600 750 900 1050 3.
Question 13 of 15 Production and Costs: End of Chapter Problems 12. Consider the relationship between average and marginal values. a. Suppose a basketball player is currently averaging 18 points per game but then, in her next game, scores 20 points. As a result of her marginal score of her average score will b. If marginal cost is less than average total cost, then average total cost is Therefore, when the marginal cost curve lies below the average total cost curve, the average total cost curve must be c. If marginal cost is greater than average total cost, then average total cost is Therefore, when the marginal cost curve lies above the average total cost curve, the average total cost curve must be Question Source: Chiang 4e - Economics Principles For A Changing World Publisher: Worth Publishers a 8:42 PM 36 32°F A O i I E 4) 12/8/2021 12
Figure 6.4 above shows the isoquants for the production of steel. In which regions of production are there increasing, decreasing, and constant returns to scale?