When x thousand dollars are spent on labor and y thousand dollars on equipment, the output of a certain factory is Q units, where Q(x, y) = 240x³/85/8 Suppose $200,000 is available for both labor and equipment. (a) How should the money be allocated between labor and equipment to generate the largest possible output? What is the largest pos- sible output? (b) Use the marginal productivity of money to estimate the change in the maximum output of the factory that will result if money available for labor and equipment is increased to $210,000.

When x thousand dollars are spent on labor and y thousand dollars on equipment, the output of a certain factory is Q units, where Q(x, y) = 240x³/85/8 Suppose $200,000 is available for both labor and equipment. (a) How should the money be allocated between labor and equipment to generate the largest possible output? What is the largest pos- sible output? (b) Use the marginal productivity of money to estimate the change in the maximum output of the factory that will result if money available for labor and equipment is increased to $210,000.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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