The marginal rate of technical substitution isThe rate at which a producer is able to exchange, without affecting thequantity of output produced, a little bit of one input for a little bit of anotherinput.b. The rate at which a producer is able to exchange, without affecting the totalcost of inputs, a little bit of one input for a little bit of another input.The rate at which a producer is able to exchange, without affecting the totalinputs used, a little bit of one output for a little bit of another output.d. A measure of the ease or difficulty with which a producer can substitute onetechnique of production for another

The marginal rate of technical substitution is the rate at which a producer is able to exchange,…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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X and Y are factors of production. They are used to make a fixed output, Z, of the product. The isoquants are convex. If Z, the output produced is held constant, will a decrease in X's price always cause the quantity of Y being used to decrease? Explain and show in a graph.
IV. Will can produce a higher grade, Gw, on an upcoming economic exam by studying. His production function depends on the number of hours he studies marginal analysis problems, A, and the number of hours he studies supply and demand problems, R. Specifically, Gw = 2.5A0.36R 0.64. His roommate David's grade production function is G) = 2.5A0.25R0.75 a. What is Will's marginal productivity from studying supply and demand problems? What is David's? b. What is Will's marginal rate of technical substitution between studying the two types of problems? What is David's?
Lesson 8 - Costs Question 7
Answer the following questions clearly in computer-typed print with Make sure you label your graphs . Question 1: In the long-run with strictly convex isoquants. If the relative price of labor (?/?)⁄ exceeds the marginal rate of technical substitution (???/???⁄). What changes should happen to the input mix? Explain your answer.
4 The prices of inputs x1; x2; x3; x4 are p1 = 2; p2 = 2; p3 = 5; and p4 = 2. If the production function is given by f(x1, x2, x3, x4) = min{x1, x2} + min{x3, x4}, what is the minimum cost of producing one unit of output?.
Assume that you are studying an economy which produces two goods, x and y, using two factors of production, capital K and labour L. The economy’s overall quantities of the two factors are given, and the capital intensity (the capital-to-labour ratio) in the production of y is always higher than the capital intensity in the production of x. At present there is an excess supply of y. Explain and illustrate graphically what will happen in the long run to:1) Prices of goods and production.2) factor prices and factor use intensities in each sector.
In the short run, given a market price equal to $50 per pressure cooker, the firm should produce a daily quantity of On the preceding graph, use the blue rectangle (circle symbols) to fill in the area that represents profit or loss of the firm given the market price of $50 and the quantity of production from your s answer. pressure cookers. profit Note: In the following question, enter a posit loss ber regardless of whether the firm earns a profit or incurs a loss. The rectangular area represents a short-run thousand per day for the firm.
Input either "increase" or "decrease" where relevant: An increase in the prices of inputs will cause the equilibrium price to ....... and the equilibrium quantity to .....
Prunella raises peaches where L is the number of units of labor she uses and T is the number of units of land she uses. Her output is f(L,T) = LT bushels of peaches. Currently, the cost of land is 8, the wage for labor is 9, and the price of peaches is 10. Prunella is currently maximizing her profits. Which occurences would cause the quantity of labor used to decrease? O An increase in the price of peaches O A increase in the price of labor O An increase in the Marginal Product of Labor O All of the above

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