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The following table shows several methods of producing 500 rubber tires per day. There are two factors, labour and capital, with prices per unit of $4 and $8, respectively. a. Compute the total cost for each production method and fill in the table. Production EA EA Method Units of Labour Units of Total Capital Cost A 130 B 110 27 C 90 35 D 70 45 E 50 57 60 GA F 30 72 EA 2234 2 C Quantity of Capital 80 75 70 65- 60 55 50 45- 40 35 30 25 20- 15 ན་ b. Which production method minimizes costs for producing 500 tires? (Select all that apply.) Production method A Production method E Production method C Production method D Production method B Production method F c. Plot the isoquant for 500 tires. Given the factor prices, draw the isocost line that corresponds to the cost-minimizing production method. 1.) Using the multipoint drawing tool, plot and label the isoquant.

The following table shows several methods of producing 500 rubber tires per day. There are two factors, labour and capital, with prices per unit of $4 and $8, respectively. a. Compute the total cost for each production method and fill in the table. Production EA EA Method Units of Labour Units of Total Capital Cost A 130 B 110 27 C 90 35 D 70 45 E 50 57 60 GA F 30 72 EA 2234 2 C Quantity of Capital 80 75 70 65- 60 55 50 45- 40 35 30 25 20- 15 ན་ b. Which production method minimizes costs for producing 500 tires? (Select all that apply.) Production method A Production method E Production method C Production method D Production method B Production method F c. Plot the isoquant for 500 tires. Given the factor prices, draw the isocost line that corresponds to the cost-minimizing production method. 1.) Using the multipoint drawing tool, plot and label the isoquant.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 25RQ: In choosing a production technology, how will firms react if one input becomes relatively more...
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2.) Using the line drawing
tool​,
plot and label the isocost line.
 
Carefully follow the instructions​ above, and only draw the required objects.
 
FILL IN BLANK 
d. Now suppose the price of labour rises to​ $5 per​ unit, but the firm still wants to produce 500 tires per day. Explain how a​ cost-minimizing firm adjusts to this change​ (with no change in​ technology).
 
A​ cost-minimizing firm will be producing on
▼
 The same
differently sloped
parallel
 
isocost line. The firm will use
▼
 more
same
less
 
labour and
▼ 
less
the same amount of
more

capital and produce on
▼
 
a higher point on the same
a lower point on the same
a lower
a higher

isoquant curve.
The following table shows several methods of producing 500 rubber tires per day. There are two factors, labour and capital, with prices per unit of $4 and $8, respectively. a. Compute the total cost for each production method and fill in the table. Production EA EA Method Units of Labour Units of Total Capital Cost A 130 B 110 27 C 90 35 D 70 45 E 50 57 60 GA F 30 72 EA 2234 2 C Quantity of Capital 80 75 70 65- 60 55 50 45- 40 35 30 25 20- 15 ན་
Transcribed Image Text:The following table shows several methods of producing 500 rubber tires per day. There are two factors, labour and capital, with prices per unit of $4 and $8, respectively. a. Compute the total cost for each production method and fill in the table. Production EA EA Method Units of Labour Units of Total Capital Cost A 130 B 110 27 C 90 35 D 70 45 E 50 57 60 GA F 30 72 EA 2234 2 C Quantity of Capital 80 75 70 65- 60 55 50 45- 40 35 30 25 20- 15 ན་
b. Which production method minimizes costs for producing 500 tires? (Select all that apply.) Production method A Production method E Production method C Production method D Production method B Production method F c. Plot the isoquant for 500 tires. Given the factor prices, draw the isocost line that corresponds to the cost-minimizing production method. 1.) Using the multipoint drawing tool, plot and label the isoquant.
Transcribed Image Text:b. Which production method minimizes costs for producing 500 tires? (Select all that apply.) Production method A Production method E Production method C Production method D Production method B Production method F c. Plot the isoquant for 500 tires. Given the factor prices, draw the isocost line that corresponds to the cost-minimizing production method. 1.) Using the multipoint drawing tool, plot and label the isoquant.
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