Problem 2: Isoquants and Isocost Lines [8 Points] Consider a firm, which uses L and K to produce Q, according to the following production function: Q = KL And the price of Capital (pk) is $10 per unit and the price of Labour (pl) is $5 per unit. 6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending $200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines. 7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that are on this Isoquant. Do so with K on the x-axis and L on the y-axis. Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit. 8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price change. Include the old and new versions for each line in the same figure, and do so with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines. Problem 2: Isoquants and Isocost Lines [8 Points] Consider a firm, which uses L and K to produce Q, according to the following production function: Q = KL And the price of Capital (pk) is $10 per unit and the price of Labour (pt) is $5 per unit. 6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending $200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines. 7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that are on this Isoquant. Do so with K on the x-axis and L on the y-axis. Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit. 8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price change. Include the old and new versions for each line in the same figure, and do so with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines.
Problem 2: Isoquants and Isocost Lines [8 Points] Consider a firm, which uses L and K to produce Q, according to the following production function: Q = KL And the price of Capital (pk) is $10 per unit and the price of Labour (pl) is $5 per unit. 6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending $200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines. 7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that are on this Isoquant. Do so with K on the x-axis and L on the y-axis. Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit. 8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price change. Include the old and new versions for each line in the same figure, and do so with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines. Problem 2: Isoquants and Isocost Lines [8 Points] Consider a firm, which uses L and K to produce Q, according to the following production function: Q = KL And the price of Capital (pk) is $10 per unit and the price of Labour (pt) is $5 per unit. 6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending $200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines. 7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that are on this Isoquant. Do so with K on the x-axis and L on the y-axis. Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit. 8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price change. Include the old and new versions for each line in the same figure, and do so with K on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines.
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
Related questions
Question
Do questions 7-8 only, u can do 6 if u need to
![Problem 2: Isoquants and Isocost Lines [8 Points]
Consider a firm, which uses L and K to produce Q, according to the following production function:
Q = KL
And the price of Capital (pk) is $10 per unit and the price of Labour (pl) is $5 per unit.
6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending
$200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis.
Include all x-intercept and y-intercepts for all Isocost lines.
7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that
are on this Isoquant. Do so with K on the x-axis and L on the y-axis.
Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit.
8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price
change. Include the old and new versions for each line in the same figure, and do so with K
on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F89c5a593-d93b-4074-bd97-e89bfb57a867%2F39b59665-7680-4793-a22c-db8fa520da4a%2F5r5rjr4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 2: Isoquants and Isocost Lines [8 Points]
Consider a firm, which uses L and K to produce Q, according to the following production function:
Q = KL
And the price of Capital (pk) is $10 per unit and the price of Labour (pl) is $5 per unit.
6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending
$200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis.
Include all x-intercept and y-intercepts for all Isocost lines.
7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that
are on this Isoquant. Do so with K on the x-axis and L on the y-axis.
Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit.
8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price
change. Include the old and new versions for each line in the same figure, and do so with K
on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines.
![Problem 2: Isoquants and Isocost Lines [8 Points]
Consider a firm, which uses L and K to produce Q, according to the following production function:
Q = KL
And the price of Capital (pk) is $10 per unit and the price of Labour (pt) is $5 per unit.
6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending
$200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis.
Include all x-intercept and y-intercepts for all Isocost lines.
7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that
are on this Isoquant. Do so with K on the x-axis and L on the y-axis.
Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit.
8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price
change. Include the old and new versions for each line in the same figure, and do so with K
on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F89c5a593-d93b-4074-bd97-e89bfb57a867%2F39b59665-7680-4793-a22c-db8fa520da4a%2Fv1h0q6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 2: Isoquants and Isocost Lines [8 Points]
Consider a firm, which uses L and K to produce Q, according to the following production function:
Q = KL
And the price of Capital (pk) is $10 per unit and the price of Labour (pt) is $5 per unit.
6. [3 points] Draw three Isocost Lines for (i) spending $50, (ii) spending $100, and (iii) spending
$200. Do so with all three on the same figure, and with K on the x-axis and L on the y-axis.
Include all x-intercept and y-intercepts for all Isocost lines.
7. [2 points] Draw the Isoquant for Q = 50, including two different production techniques that
are on this Isoquant. Do so with K on the x-axis and L on the y-axis.
Now suppose that the price of Labour (pl) increases from $5 per unit to $10 per unit.
8. [3 points] Draw how the three Isocost Lines you drew in Q6 shift as a result of this price
change. Include the old and new versions for each line in the same figure, and do so with K
on the x-axis and L on the y-axis. Include all x-intercept and y-intercepts for all Isocost lines.
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