A laundry cleans white clothes using a production function q = B + 2G, where B is the number of cups of Clorox bleach, G is the number of cups of a generic bleach that is half as potent, and q is the basketfuls of clothes that are cleaned. Draw an isoquant for one basketful of clothes. What is the marginal product of B? What is the marginal rate of technical substitution at each point on an isoquant?

A laundry cleans white clothes using a production function q = B + 2G, where B is the number of cups of Clorox bleach, G is the number of cups of a generic bleach that is half as potent, and q is the basketfuls of clothes that are cleaned. Draw an isoquant for one basketful of clothes. What is the marginal product of B? What is the marginal rate of technical substitution at each point on an isoquant?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.1P

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

Definition Definition Rate at which one factor of production is decreased in order to maintain the same level of output when another factor of production is increased. MRTS allows for the substitution between factors of production: labor (L) and capital (K) in order to maintain a given level of output.

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