You are given the following data:Cost = C = $12,000.00w = $100.00 per unit of laborr = $100.00 per unit of capitalThese data are used to construct the isocost line (C¹) in thediagram to the right.Suppose the wage increases to $300.00 but that the firm choosesto keep using the same amount of labor and capital to produce200 units of output.Given this new set of factor prices (w' = $300.00, r = $100.00), howmuch have costs changed if the set of input choices remains atpoint A? $. (Enter a numeric response using a real numberrounded to two decimal places.)Use the line drawing tool to draw a new isocost line showing anincrease in w to $300.00, given the firm chooses to keep using thesame amount of labor and capital to produce 200 units of output.Label this line 'C².Carefully follow the instructions above, and only draw the requiredobjects.CCapital, K240-220-200-180-160-140-120-100-80-60-40-20-q=2000-0 20 40 60 80 100 120 140 160 180 200 220 240Labor, L

The iso-cost line is the locus of points of labour and capital units that when used in production…

are given the following data: Cost = = $12,000.00 w = $100.00 per unit of labor r = $100.00 per unit of capital ese data are used to construct the isocost line (C¹) in the gram to the right. opose the wage increases to $300.00 but that the firm chooses keep using the same amount of labor and capital to produce O units of output. en this new set of factor prices (w' = $300.00, r = $100.00), how ch have costs changed if the set of input choices remains at nt A? $. (Enter a numeric response using a real number nded to two decimal places.) e the line drawing tool to draw a new isocost line showing an rease in w to $300.00, given the firm chooses to keep using the ne amount of labor and capital to produce 200 units of output. pel this line 'C², refully follow the instructions above, and only draw the required ects. C Capital, K 240 220- 200- 180- 160- 140- 120- 100- 80- 60- 40- 20- 0- 0 V 20 q=200 e 40 60 80 100 120 140 160 180 200 220 240 Labor, L

are given the following data: Cost = = $12,000.00 w = $100.00 per unit of labor r = $100.00 per unit of capital ese data are used to construct the isocost line (C¹) in the gram to the right. opose the wage increases to $300.00 but that the firm chooses keep using the same amount of labor and capital to produce O units of output. en this new set of factor prices (w' = $300.00, r = $100.00), how ch have costs changed if the set of input choices remains at nt A? $. (Enter a numeric response using a real number nded to two decimal places.) e the line drawing tool to draw a new isocost line showing an rease in w to $300.00, given the firm chooses to keep using the ne amount of labor and capital to produce 200 units of output. pel this line 'C², refully follow the instructions above, and only draw the required ects. C Capital, K 240 220- 200- 180- 160- 140- 120- 100- 80- 60- 40- 20- 0- 0 V 20 q=200 e 40 60 80 100 120 140 160 180 200 220 240 Labor, L

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

You are given the following data:
Cost = C = $12,000.00
w = $100.00 per unit of labor
r = $100.00 per unit of capital
These data are used to construct the isocost line (C¹) in the
diagram to the right.
Suppose the wage increases to $300.00 but that the firm chooses
to keep using the same amount of labor and capital to produce
200 units of output.
Given this new set of factor prices (w' = $300.00, r = $100.00), how
much have costs changed if the set of input choices remains at
point A? $. (Enter a numeric response using a real number
rounded to two decimal places.)
Use the line drawing tool to draw a new isocost line showing an
increase in w to $300.00, given the firm chooses to keep using the
same amount of labor and capital to produce 200 units of output.
Label this line 'C².
Carefully follow the instructions above, and only draw the required
objects.
C
Capital, K
240-
220-
200-
180-
160-
140-
120-
100-
80-
60-
40-
20-
q=200
0-
0 20 40 60 80 100 120 140 160 180 200 220 240
Labor, L

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