a) Calculate the marginal product (MP1) for the mixers. Does the production function have increasing, decreasing, constant marginal product for the mixers? b) Suppose in the short run the amount of machines she has is fixed at 27. How many mixers should she use? How many baklavas will she produce? How much profit will she make? c)Usinag an isoprofit, as well as the production function, draw a diagram of your soltuion from part (b). carefully label all the slopes and intercepts. d) In the long run, how many mixers should she use? How many machines? How many baklavas will she make? e) Suppose that the government decides to provide a $1 subsidy per mixer. What is the profit-maximizing amount of input to use now?
a) Calculate the marginal product (MP1) for the mixers. Does the production function have increasing, decreasing, constant marginal product for the mixers? b) Suppose in the short run the amount of machines she has is fixed at 27. How many mixers should she use? How many baklavas will she produce? How much profit will she make? c)Usinag an isoprofit, as well as the production function, draw a diagram of your soltuion from part (b). carefully label all the slopes and intercepts. d) In the long run, how many mixers should she use? How many machines? How many baklavas will she make? e) Suppose that the government decides to provide a $1 subsidy per mixer. What is the profit-maximizing amount of input to use now?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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a) Calculate the marginal product (MP1) for the mixers. Does the production function have increasing, decreasing, constant marginal product for the mixers?
b) Suppose in the short run the amount of machines she has is fixed at 27. How many mixers should she use? How many baklavas will she produce? How much profit will she make?
c)Usinag an isoprofit, as well as the production function, draw a diagram of your soltuion from part (b). carefully label all the slopes and intercepts.
d) In the long run, how many mixers should she use? How many machines? How many baklavas will she make?
e) Suppose that the government decides to provide a $1 subsidy per mixer. What is the profit-maximizing amount of input to use now?
Transcribed Image Text:2. Cameron runs a dessert shop in Napanee. She uses mixers (x₁) and machines (x2) to
1 1
3
make baklavas. Her production function is f(x₁, x₂) = xx. The price of baklavas is $20,
the price of mixers is $5, and the price of machines is $2.
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