ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 9, Problem 86P
To determine
i.
Present worth of project.
ii.
To determine
Annual subsidy.
To determine
iii.
Present worth of project with inclusion of subsidy.
To determine
iv.
Importance of difference in interest rates.
To determine
v.
Primary benefits of system.
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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 samedifferently slopedparallel
isocost line. The firm will use
▼
moresameless
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.
QK
Using the graph on the right, determine how the firm
should change the quantity of the production factors in
order to reduce the costs.
The firm that is producing at point A can reduce its costs
for producing 2000 units by employing
A. same capital and more labour.
B. less capital and more labour.
○ C. less capital and the same labour.
D. more capital and more labour.
OE. more capital and less labour.
C
A
B
Q =4000
Q = 2000
C
Isocost line
QL
PL
Suppose the price ratio
is the same along isocost
PK
lines A and B. In the figure at right, the difference between
isocost line A and isocost line B is that
A. the total cost is larger along B.
B. the total cost is larger along A.
OC. labour is relatively more expensive along A.
○ D. the level of output is lower along A.
OE. both capital and labour are relatively cheaper
along A.
Capital
B
Labour
Chapter 9 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 9 - Prob. 2QTCCh. 9 - Prob. 3QTCCh. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - Prob. 8P
Ch. 9 - Prob. 9PCh. 9 - Prob. 10PCh. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Prob. 13PCh. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 27PCh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - Prob. 30PCh. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 33PCh. 9 - Prob. 34PCh. 9 - Prob. 35PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Prob. 38PCh. 9 - Prob. 39PCh. 9 - Prob. 40PCh. 9 - Prob. 41PCh. 9 - Prob. 42PCh. 9 - Prob. 43PCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Prob. 46PCh. 9 - Prob. 47PCh. 9 - Prob. 48PCh. 9 - Prob. 49PCh. 9 - Prob. 50PCh. 9 - Prob. 51PCh. 9 - Prob. 52PCh. 9 - Prob. 53PCh. 9 - Prob. 54PCh. 9 - Prob. 55PCh. 9 - Prob. 56PCh. 9 - Prob. 57PCh. 9 - Prob. 58PCh. 9 - Prob. 59PCh. 9 - Prob. 60PCh. 9 - Prob. 61PCh. 9 - Prob. 62PCh. 9 - Prob. 63PCh. 9 - Prob. 64PCh. 9 - Prob. 65PCh. 9 - Prob. 66PCh. 9 - Prob. 67PCh. 9 - Prob. 68PCh. 9 - Prob. 69PCh. 9 - Prob. 70PCh. 9 - Prob. 71PCh. 9 - Prob. 72PCh. 9 - Prob. 73PCh. 9 - Prob. 74PCh. 9 - Prob. 75PCh. 9 - Prob. 77PCh. 9 - Prob. 78PCh. 9 - Prob. 79PCh. 9 - Prob. 80PCh. 9 - Prob. 81PCh. 9 - Prob. 83PCh. 9 - Prob. 84PCh. 9 - Prob. 85PCh. 9 - Prob. 86PCh. 9 - Prob. 87PCh. 9 - Prob. 88P
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- Using the graph on the right, determine the per unit prices of capital and labour. 20- Given the information provided about the isocost lines, we know that the per unit price of capital is TC=$100 and the per unit price of labour is 16- TC $80 ○ A. $50; $20 ○ B. $2; $5 ○ C. $5; $2 ○ D. $20; $50 E. not determinable; not determinable Quantity of K 12 TC $60 TC $40 0 10 20 30 Quantity of L 40arrow_forwardThe diagram to the right contains isocost lines A and B. If the price of capital is the same for both lines, then the difference between isocost line A and isocost line B is that OA. the total cost is larger along B. B. the level of output is lower along A. C. both capital and labour are cheaper along A. OD. labour is more expensive along A. ○ E. labour is more expensive along B. Capital Labourarrow_forwardFor the firm whose cost curves are shown at right, the minimum efficient scale is ○ A. between 60 and 140 units of production. OB. about 20 units of production. OC. about 60 units of production. OD. about 100 units of production. OE. the level of fixed cost corresponding to SRATC2. SRATC₁ LRAC SRATC4 SRATC₂ SRATC3 เนด เad iso C 20 20 40 60 80 100 120 140 160 180 200 Output per Periodarrow_forward
- SRATC₂ SRATC3 In the figure, increasing long-run average total costs for the firm are confined to the output range OA. where the LRAC curve is downward sloping. B. above 80 units of output. O C. above 50 units of output. OD. between 50 and 80 units of output. SRATC₁ OE. between 10 and 100 units of output. ---- SRATC LRAC 10 20 30 40 50 60 70 80 90 100 Output per Periodarrow_forwardFor the firm whose cost curves are shown at right, the minimum efficient scale is OA. between 10 and 50 units of production. OB. about 80 units of production. O C. the level of fixed cost corresponding to SRATC₁. OD. about 10 units of production. ○ E. about 50 units of production. Cost per Unit SRATC₁ LRAC SRATC2 SRATC4 SRATC3 10 20 30 40 50 60 70 80 Output per Period 90 100arrow_forward• 3 different people working at any companies under the BPO industry in the Philippines. • What are the 3 different Vision, Mission, Duties and Responsibilities and Career Path of these people in their companies under the BPO industry?arrow_forward
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