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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Answer letter A

Transcribed Image Text: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
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

Transcribed Image Text:b) Assume that the quantity of X is fixed at 2 units. If output sells
for P3 and the cost of Y is P120 per day, how many units of Y will
be employed?
c) Assume that the company is currently producing 162 units of
output per day using 1 unit of X and 3 units of Y. The daily cost
per unit of X is P120 and that of Y is also P120. Would you
recommend a change in the present input combination? Why or
why not?
d) What is the nature of the returns to scale for this production
system if the optimal input combination requires that X = Y?
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 1 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON


Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON

Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON

Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning

Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education