A firm that used only labor and capital in production incurs a total cost of ₱4,000.00. The wage rate of labor is 100 pesos and a unit of capital cost 200 pesos. b. What is the isocost function of the firm? c. Graph the isocost of the firm by plotting units of capital on the y-axis and units of labor on the x-axis. d. What is the relative price between the two inputs of production? e. If the price of a unit of labor becomes 400 pesos, what is the isocost function of the firm? f. Graph the new isocost line of the firm on the same set of axes in (b).

A firm that used only labor and capital in production incurs a total cost of ₱4,000.00. The wage rate of labor is 100 pesos and a unit of capital cost 200 pesos. b. What is the isocost function of the firm? c. Graph the isocost of the firm by plotting units of capital on the y-axis and units of labor on the x-axis. d. What is the relative price between the two inputs of production? e. If the price of a unit of labor becomes 400 pesos, what is the isocost function of the firm? f. Graph the new isocost line of the firm on the same set of axes in (b).

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

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