Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
N4

Transcribed Image Text:Suppose that the production of crayons (q) is conducted at two locations and uses only labor as an input. The production
function in location 1 is given by q = 10/95 and in location 2 by q2 = 50/5.
a. If a single firm produces crayons in both locations, then it will obviously want to get as large an output as possible given
the labor input it uses. How should it allocate labor between the locations to do so? Explain precisely the relationship
between /, and z.
b. Assuming that the firm operates in the efficient manner described in part (a), how does total output (9) depend on the total
amount of labor hired (D?
Question is attached below. Please help me
with the solution of part B. Thank youu
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