Instacart offers consumers a convenient form of home delivery service for groceries. Units ofoutput (q) are individual grocery deliveries/day. Grocery deliveries are achieved through the useof delivery trucks (K) and workers (L). The price of labor (w) is $10/worker. Use the provided graphto answer the question below.K1615141321121110932 DS1876542111 workersAq=501 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 1712 workersBLInstacart is currently operating in the short run with its capital stock (its trucks) fixed at (K = 313 workersC). Let's say it wants to expand its production up to 100 grocery deliveries/day. How muchlabor is needed to ensure that Instacart can meet its 100 grocery deliveries/day productionquota?14 workersq=100Some other quantity of workers, outside of the totals listed above

Instacart offers consumers a convenient form of home delivery service for groceries. Units of output (q) are individual grocery deliveries/day. Grocery deliveries are achieved through the use of delivery trucks (K) and workers (L). The price of labor (w) is $10/worker. Use the provided graph to answer the question below.

Instacart offers consumers a convenient form of home delivery service for groceries. Units of output (q) are individual grocery deliveries/day. Grocery deliveries are achieved through the use of delivery trucks (K) and workers (L). The price of labor (w) is $10/worker. Use the provided graph to answer the question below.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The fast food company Schnabb uses labor and capital to produce its product. Holding the production fixed, what is the effect of a lower price of capital on the ratio between the number of workers and the amount of capital used? Explain using isocosts and an isoquant.
For a decrease in the price of capital (K), construct a table AND explain the scale and substitution effects for a producer.
A baker uses labor (L) and raw materials (M) to produce mini Muhlenberg Mule sugar figurines (q). The process is fairly simple as workers only must make the sugar mixture and pour the mixture into the mule molds. The baker’s production function is as follows f(L, M) = L 0.50M. Let wL and wM denote the prices of a unit of L and M, respectively. (a) Write the firm’s cost minimization problem if it wants to produce q units of output. (b) Write the Lagrangian function that describes the cost minimization problem. (c) Derive the long run conditional factor input demands for L and M as a function of wL, wM, and q; L ∗ (wL, wM, q) and M∗ (wL, wM, q). (d) Suppose wL = $25 and wM = $2. Determine the cost-minimizing combination of inputs if the baker wants to produce 200 mules. (e) Using wL = $25 and wM = $2 and the demand functions from part (c), write the firm’s long run cost function CLR(q).
Suppose that Maria is starting a food ordering and delivery company. Customers order meals online. Employees prepare the meals and deliver them to customers. Maintenance of the online platform for ordering meals costs the company $5 per day. The company also rents space where orders are prepared. Rent costs $50 per day. To make the deliveries, the business also rents two delivery cars that cost $10 each per day. The costs of ingredients for preparing different numbers of meals are provided in the table below. Maria also has to hire between 0 and 10 workers (depending on the number of meals she chooses to make) to buy ingredients, prepare meals, and deliver the orders. She will pay each employee $120 per day. The first two columns of the table below show how many meals different number of workers can prepare and deliver. Price per meal $50 Workers (Labor L) 0 1 2 3 4 5 6 7 8 9 10 Meals (Output Q) ol- 30 42 52 60 67 73 79 85 90 95 MPL FC Cost of ingredients $10 $75 $100 $121 $138 $152…
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