7. A 200-pound steer can be sustained on a diet calling for various proportions of grass and grain. These combinations are shown in the table. Pounds of Grass 50 56 60 68 80 88 Pounds of Grain 80 70 65 60 54 52 a. Plot the isoquant corresponding to the inputs necessary to sustain a 200-pound steer. Comment on its shape. b. The rancher's cost of grass is $.10 per pound; the cost of grain is $.07 per pound. He prefers a feed mix of 68 pounds of grass and 60 pounds of grain. Is this a least-cost mix? If not, what is? Explain. c. The rancher believes there are constant returns to scale in fattening cattle. At current feed prices, what input quantities should he choose if he wants to raise the steer's weight to 250 pounds?

7. A 200-pound steer can be sustained on a diet calling for various proportions of grass and grain. These combinations are shown in the table. Pounds of Grass 50 56 60 68 80 88 Pounds of Grain 80 70 65 60 54 52 a. Plot the isoquant corresponding to the inputs necessary to sustain a 200-pound steer. Comment on its shape. b. The rancher's cost of grass is $.10 per pound; the cost of grain is $.07 per pound. He prefers a feed mix of 68 pounds of grass and 60 pounds of grain. Is this a least-cost mix? If not, what is? Explain. c. The rancher believes there are constant returns to scale in fattening cattle. At current feed prices, what input quantities should he choose if he wants to raise the steer's weight to 250 pounds?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

7. A 200-pound steer can be sustained on a diet calling for various
of grass and grain. These combinations are shown in the table.
proportions
Pounds of Grass
50
56
60
68
80
88
Pounds of Grain
80
70
65
60
54
52
a. Plot the isoquant corresponding to the inputs necessary to sustain a
200-pound steer. Comment on its shape.
b. The rancher's cost of grass is $.10 per pound; the cost of grain is $.07
per pound. He prefers a feed mix of 68 pounds of grass and 60
pounds of grain. Is this a least-cost mix? If not, what is? Explain.
c. The rancher believes there are constant returns to scale in fattening
cattle. At current feed prices, what input quantities should he choose
if he wants to raise the steer's weight to 250 pounds?

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