For each of the following examples, draw a representative isoquant. What can you say about the marginal rate of technical substitution? A firm can hire only full-time employees to produce its output, or it can hire some combination of full-time and part-time employees. For each full-time worker let go, the firm must hire an increasing number of temporary employees to maintain the same level of output. Using the three-point curved line drawing tool, graph an isoquant curve for the firm in the top diagram. Label this curve 'Isoquant'. Carefully follow the instructions above, and only draw the required object. Part-time workers 20 19- 18- 17- 16- 15- 14- 13- 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- -O F~ 10 12 Full-time workers 14 16 18 20

For each of the following examples, draw a representative isoquant. What can you say about the marginal rate of technical substitution? A firm can hire only full-time employees to produce its output, or it can hire some combination of full-time and part-time employees. For each full-time worker let go, the firm must hire an increasing number of temporary employees to maintain the same level of output. Using the three-point curved line drawing tool, graph an isoquant curve for the firm in the top diagram. Label this curve 'Isoquant'. Carefully follow the instructions above, and only draw the required object. Part-time workers 20 19- 18- 17- 16- 15- 14- 13- 12- 11- 10- 9- 8- 7- 6- 5- 4- 3- 2- 1- -O F~ 10 12 Full-time workers 14 16 18 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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

For each of the following examples, draw a representative
isoquant. What can you say about the marginal rate of
technical substitution?
A firm can hire only full-time employees to produce its
output, or it can hire some combination of full-time and
part-time employees. For each full-time worker let go, the
firm must hire an increasing number of temporary
employees to maintain the same level of output.
Using the three-point curved line drawing tool, graph an
isoquant curve for the firm in the top diagram. Label this
curve 'Isoquant'.
Carefully follow the instructions above, and only draw the
required object.
Part-time workers
20
19-
18-
17-
1654
13-
12-
11-
10-
8-
4-
3-
O
6
8 10 12 14 16
Full-time workers
18
20

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