EBK ECONOMICS: PRINCIPLES AND POLICY
EBK ECONOMICS: PRINCIPLES AND POLICY
13th Edition
ISBN: 8220100605932
Author: Blinder
Publisher: Cengage Learning US
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Chapter 7, Problem 9TY
To determine

The use of inputs for larger quantity.

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XYZ Services uses four(4) word processors and two(2) two typewriters to produce reports.The marginal product of a typewriter is 50 pages per day and the marginal product of aword processor is 500 pages per day.The rental price of a typewriter is GHS1 per day,whereas the rental price of a word processor is GHS 50 per day.Is Temporary services utilizing typewriters and word processors in a cost-minimizing manner?Explain.
A widget manufacturer has a production function of the form q = 6L + 10K . If the wage rate (w) is $4 and the rental rate on capital (r) is $5. Are the returns to scale increasing, constant, or decreasing for this production function?   What cost minimization combination of K and L will the manufacturer employs to produce 300 units of output?   Suppose that the price of capital increases to $7 per unit. If manufacturer continues to produce 300 units,what cost minimization choice of inputs capital and labor should the firm used.   Suppose that the capital input is fixed at K = 3 units in the short run, what is the short run total cost function with q
Say that the last tonne of steel produced by a steel company imposes three types of costs: labour costs of $25, additional equipment costs of $10, and the cost of additional “crud” dumped into the air of $15. What costs will the steel company consider in deciding whether to produce another tonne of steel?  
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