A furniture manufacturing business requires both machines and labor to produce finished products. The businesscurrently produces 100 pieces of furniture per time period, as shown in the following graph.Machines302010CAORTS = -2ORTS = 1O RTS=-1ORTS = 28TC₁10TC₂Refer to Figure 8-1. Assuming the business is producing 100 pieces of furniture using the cost-minimizing inputcombination, what is the RTS of workers for machines?20Workers9₁=100TC₂30

Microeconomic firm theory focuses on firms' profit-maximizing production, resource allocation, and…

A furniture manufacturing business requires both machines and labor to produce finished products. The business currently produces 100 pieces of furniture per time period, as shown in the following graph. Machines 30 20 10 ORTS = -2 ORTS=-1 O RTS = 1 8 ORTS=2 TC₁ 10 TC₂ Refer to Figure 8-1. Assuming the business is producing 100 pieces of furniture using the cost-minimizing input combination, what is the RTS of workers for machines? 20 Workers 91-100 TC3 30

A furniture manufacturing business requires both machines and labor to produce finished products. The business currently produces 100 pieces of furniture per time period, as shown in the following graph. Machines 30 20 10 ORTS = -2 ORTS=-1 O RTS = 1 8 ORTS=2 TC₁ 10 TC₂ Refer to Figure 8-1. Assuming the business is producing 100 pieces of furniture using the cost-minimizing input combination, what is the RTS of workers for machines? 20 Workers 91-100 TC3 30

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the production function Q = 10KL. Will the MRTS for this production function remain constant along the Q = 200 isoquant? Explain briefly. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 三v A v In BIUS Paragraph Arial 10pt 田田田田 EX + x' X2
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Given the following production function: q = 10KL. Assume that w = 25, r = 75 and C = 1200. (a) Mathematically find the minimum cost combination of capital and labour to produce a given level of output.b) Does the production function in part (a) show increasing returns to scale, decreasing returns to scale, or constant returns to scale? Explain. (c) Using isoquants and isocosts, graphically illustrate the effect of an increase in the wage rate, assuming the firm is producing at the same level of output.
13. Suppose you have a production technology given by f(x1,x2) = min{2æ1, x2} and you are producing at the point where x1 = 10 and x2 = 20.
Suppose a pizza parlor has the following production costs: $3.00 in labor per pizza, $2.00 in ingredients per pizza, $0.30 in electricity per pizza, $4,000 in restaurant rent per month, and $400 in insurance per month. Assume the pizza parlor produces 8,000 pizzas per month. What is the variable cost of production (per month)? The variable cost of production is $ (Enter your response as an integer.)
Determine the multifactor productivity for the combined input of the labor and the machine time using the following input : labor :3000$,material :800$, .overhead: 20o0$ . keep in mind the production is 1760 unit
13. Suppose you have a production technology given by f(x1,x2) = min{2æ1, x2} and you are producing at the point where x1 = 10 and x2 = 20.
A firm has the production function f(X, Y) = x²/2 y1/2, where X is the amount of factor x used and Y is the amount of factor y used. On a diagram we put X on the horizontal axis and Y on the vertical axis. We draw some isoquants. Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of -3. The straight line we drew Select one: O a. is vertical. b. is horizontal. c. is a ray through the origin with slope 3. d. is a ray through the origin with slope 4. O e. has a negative slope.
A small clothing manufacturer employs a production method that is approximated by the following production function: q=12KL², where L measures the number of labor hours and K measures the number of rental hours for the machines used in the clothing construction process. Does this production process exhibit increasing, decreasing, or constant returns to scale? Briefly explain your answer. The hourly wage rate for workers at this company is $15; and the rental cost on the machines is $75 per hour. The company has a total budget of $3,150 that it can allocate to cover weekly production costs. The goal of the company's owner is to maximize their output, subject to the constraint of their production budget. Determine the output-maximizing levels of labor and capital the owner will employ.
Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $3.00 in ingredients per pizza, $0.20 in electricity per pizza, $1,500 in restaurant rent per month, and $250 in insurance per month. Assume the pizza parlor produces 1,000 pizzas per month. What is the variable cost of production (per month)? The variable cost of production is $ (Enter your response as an integer.) What is the fixed cost of production (per month)? The fixed cost of production is $ ☐. (Enter your response as an integer.)
Cheburashka uses kiwi fruits (K) and labour (L) to produce juice (q). His production function is: q=min{L/3, K0.5}, where labour is measured in hours, kiwi fruits in kg, and juice in (large) bottles. For example, if he uses 4 kg of kiwi fruits and 6 hours of labour, he can produce 2 bottles of juice. a) Draw isoquants for q = 1, q = 2 and q = 3 on a graph with labour on the horizontal axis and kiwi fruits on the vertical one. = $5 per kg. b) Let the price of labour-hour be given by w = $18 and the price of fruit by p What is the optimal amount of labour and fruit to produce q bottles of juice if Cheburashka strives to minimise costs? (Note that you need to provide expressions L(q) and K(q)). Illustrate on the graph from a) by drawing corresponding isocost lines. c) Draw the Cheburashka's expansion path on a graph from a). Derive an expression for the expansion path, i.e., K as a function of L. How does it depend on the wage and the price of kiwi?