MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12.A, Problem 2QE
(a)
To determine
Graphically illustrate the isocost curve and the impact when the production budget doubles.
(b)
To determine
Determine the changes in isocost curve, when the cost of materials increases.
(c)
To determine
Determine the changes in isocost curve, when the cost of materials rises to $10 a unit.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A firm pays $10 per unit of labor and $5 per unit of capital. make diagram of the isocost curves for production total cost of $100; total cost of $200; and total cost of $500.
Isoquant curves and isocost curves are tools that can explain how a firm might best respond to changes in the production environment. Present an example of an isocost curve where labor and capital are the two inputs, and explain what it is using language someone not trained in economics could understand. Present an example of an isoquant in the same diagram you used for your isocost curve, and draw the isoquant so it cuts the isocost curve twice. Explain what an isoquant is using language someone not trained in economics could understand. Label the two points A and B, where the isocost and isoquant curves intersect. Present a logical argument that explains why the firm should operate neither at point A nor point B, and present a point that would be optimal by drawing a new isoquant curve in the diagram. Add a second isocost curve to your diagram such that the firm is spending more money on inputs. Add a third isoquant to your diagram to show a firm that would become more capital…
Question 4
The firm can use two inputs, L and K. The price of L= 20 and price of K = 30. Total cost = 300. As
usual in the two input graph, units of L are on the horizontal axis and K on the vertical.
The slope of the isocost line is [Select]
The maximum units of K that can be purchased is [Select]
The maximum units of L that can be purchased is [Select]
2 pts
Is the bundle of K-9 and L- 5 on the isocost line? [Select]
Chapter 12 Solutions
MICROECONOMICS
Ch. 12.1 - Prob. 1QCh. 12.1 - Prob. 2QCh. 12.1 - Prob. 3QCh. 12.1 - Prob. 4QCh. 12.1 - Prob. 5QCh. 12.1 - Prob. 6QCh. 12.1 - Prob. 7QCh. 12.1 - Prob. 8QCh. 12.1 - Prob. 9QCh. 12.1 - Prob. 10Q
Ch. 12.A - Prob. 1QECh. 12.A - Prob. 2QECh. 12.A - Prob. 3QECh. 12.A - Prob. 4QECh. 12.A - Prob. 5QECh. 12.A - Prob. 6QECh. 12.A - Prob. 7QECh. 12 - Prob. 1QECh. 12 - Prob. 2QECh. 12 - Prob. 3QECh. 12 - Prob. 4QECh. 12 - Prob. 5QECh. 12 - Prob. 6QECh. 12 - Prob. 7QECh. 12 - Prob. 8QECh. 12 - Prob. 9QECh. 12 - Prob. 10QECh. 12 - Prob. 11QECh. 12 - Prob. 12QECh. 12 - Prob. 13QECh. 12 - Prob. 14QECh. 12 - Prob. 15QECh. 12 - Prob. 16QECh. 12 - Prob. 17QECh. 12 - Prob. 1QAPCh. 12 - Prob. 2QAPCh. 12 - Prob. 3QAPCh. 12 - Prob. 4QAPCh. 12 - Prob. 5QAPCh. 12 - Prob. 1IPCh. 12 - Prob. 2IPCh. 12 - Prob. 3IPCh. 12 - Prob. 4IPCh. 12 - Prob. 5IPCh. 12 - Prob. 6IP
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.Similar questions
- The cost curve for producing widgets passes through the following points and is piecewise linear in between. Solve, a. What is the fixed cost of producing 600 widgets? b. What is the variable cost of producing 600 widgets? c. What is the cost per unit if only 400 widgets are produced?arrow_forwardWe can describe inputs as either fixed or variable. Thinking about a company that assembles cars, which of the following would be an example of a fixed input that could not be changed in the short run? Group of answer choices A)The robots that help assemble the cars. B)The building where the assembly takes place. C)The electricity required to support the assembly activity. D)The employees that work for the company.arrow_forwardcharlie is running a coffe shop and are currently selling 200 coffees. it cost them 2,0000 to hire a graphic designer to make a logo for their shop, 800 for coffe beans at this level of profuction, and 40,000 to lease out the building for the coffe shop for a year. what is charlies average variables cost ?arrow_forward
- A firm uses corn and protein supplement to mix a particular type of hog feed. Corn costs $0.08 per pound and protein supplement costs $0.12 per pound. Let's assume the firm has $4,000 these two inputs. Plot the iso-cost line suggested by this information in the following graph. What is the value of this curve's slope?arrow_forwardBrian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{1/3L, 2K}. The inputs are perfect complement.If he uses 0.5 kg of wool and 3 hours of labour, he can produce 1 t-shirt. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axisand wool on vertical axis.arrow_forwardProblem 1 a) The local cleaner launders white clothes using the production function q = 3B + G, where B is the number of cups of a brand bleach and G is the number of cups of a generic bleach that is half as potent. a.1) In a graph, draw an isoquant. a.2) What are the marginal product of B and G? What is the marginal rate of technical substitution? Technologyarrow_forward
- Refer to the table below. How will the marginal cost curve look like if you draw it? Units of Output Total Cost 10 20 20 40 30 60 40 80 50 100 60 120 Select one: a. upward sloping b. downward sloping c. horizontal d. verticalarrow_forwardSuppose the wage rate for labor is $20 an hour and the rental rate for capital is $50 per hour. Based on this information, please answer the questions appearing below the graph. a. Draw the iso-cost line associated with an hourly budget of $1,000. b. What is the least-cost level of capital and labor this business should utilize when packaging 1,000 cases of fruit juice? How did you arrive at this answer? C. How much does it cost this business to package 1,000 cases of fruit juice? If the firm can sell the juice for $50 per case, what is its accounting profit?arrow_forward2arrow_forward
- In 50 words, answer the following question: In the class, we know the reason why the MC curve intersects the ATC curve at the minimum level of ATC. Actually, MC curve also intersects the AVC curve at the minimum level of AVC. Is it a coincidence? What make the similarity? (Hint: How MC affect the change in ATC? Does it the same for AVC?)arrow_forwardWhat is sunk cost? Provide an example of sunk cost other than one from the book and explain it. Why are such cost irrelevant in making decisions about future actions?arrow_forwardA manufacturer can produce 5,130 cell phones when a dollars is spent on labor and y dollars is spent on capital. The model that represents the cost of producing the cell phones is given by 95 x y z = 5130 A. Find the marginal cost model, in terms of x and y. dy dx = B. Find the marginal cost when $81 is spent on labor and $16 is spent on capital. Round the marginal cost to the nearest cent. $arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc