An appliance manufacturing business requires both machines and labor to produce finished products. The following graph shows the isoquant map for this business. Assume the business currently produces 300 appliances per time period using 27 workers and 27 machines.

An appliance manufacturing business requires both machines and labor to produce finished products. The following graph shows the isoquant map for this business. Assume the business currently produces 300 appliances per time period using 27 workers and 27 machines.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Economics

Figure 7-4
An appliance manufacturing business requires both machines and labor to produce finished products. The following
graph shows the isoquant map for this business. Assume the business currently produces 300 appliances per time period
using 27 workers and 27 machines.
Machines
31-
27+
20-
10
Point A
Point C
Point B
10
Point D
20
B
STO
q=100
27 31
Workers
Refer to Figure 7-4. Which point on the graph represents the business's current combination of capital and labor?
q = 400
q=300
q=200

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