Answer letter A The following production table gives estimates of the maximumamounts of output possible with different combinations of twoinput factors, X and Y. (Assume that these are just illustrativepoints on a spectrum of continuous input combinations.)Units ofY Used543210188162130941Estimated Output per Day36042132437628232423427216218834Units of X used30527223418813024704213603052105 b) Assume that the quantity of X is fixed at 2 units. If output sellsfor P3 and the cost of Y is P120 per day, how many units of Y willbe employed?c) Assume that the company is currently producing 162 units ofoutput per day using 1 unit of X and 3 units of Y. The daily costper unit of X is P120 and that of Y is also P120. Would yourecommend a change in the present input combination? Why orwhy not?d) What is the nature of the returns to scale for this productionsystem if the optimal input combination requires that X = Y?

The change in output brought on by one more unit of input is known as the marginal product. It is…

The following production table gives estimates of the maximum amounts of output possible with different combinations of two input factors, X and Y. (Assume that these are just illustrative points on a spectrum of continuous input combinations.) Units of Y Used 5 4 3 2 210 188 162 130 94 1 Estimated Output per Day 360 421 324 376 282 324 234 272 162 188 3 4 Units of X used 305 272 234 188 130 2 470 421 360 305 210 5

The following production table gives estimates of the maximum amounts of output possible with different combinations of two input factors, X and Y. (Assume that these are just illustrative points on a spectrum of continuous input combinations.) Units of Y Used 5 4 3 2 210 188 162 130 94 1 Estimated Output per Day 360 421 324 376 282 324 234 272 162 188 3 4 Units of X used 305 272 234 188 130 2 470 421 360 305 210 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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