(a) Explain how a firm uses resource price and value data to determine the appropriate combination of capital and labor resources to use in order to maximize profits. (b) How does this change when the firm want to produce a specific quantity of product with the least-cost combination of resources? (c) If a software firm estimates that the MP of labor is 3 apps per month and the price of labor is $1100 per month, while the MP of capital is 5 apps per month and its price is $2000, should the firm hire more labor and decrease its capital use or increase its use of capital and use fewer labor resources?

(a) Explain how a firm uses resource price and value data to determine the appropriate combination of capital and labor resources to use in order to maximize profits. (b) How does this change when the firm want to produce a specific quantity of product with the least-cost combination of resources? (c) If a software firm estimates that the MP of labor is 3 apps per month and the price of labor is $1100 per month, while the MP of capital is 5 apps per month and its price is $2000, should the firm hire more labor and decrease its capital use or increase its use of capital and use fewer labor resources?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 42P: A small company that shovels sidewalks and driveways has 100 homes signed up for its services this...

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A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?
city is trying to estimate the most money it should offer to contractors as an incentive for them to finish a disruptive road project early. The transportation project lengthens transport times by 10 hours per week for 40,000 workers. Assume that all workers are paid $10 per hour in a perfectly competitive labor market. What is the most that the city should pay to the contractors as an incentive for completing the project four weeks early
For each of the following situations involving marginal cost (MC) and marginal benefit (MB), indicate whether it would be best to produce more, fewer, or the current number of units. a. 3,000 units at which MC = $10 and MB = $13: (Click to select) More Fewer Current number . b. 11 units at which MC = $4 and MB = $3: (Click to select) More Fewer Current number . c. 43,277 units at which MC = $99 and MB = $99: (Click to select) More Fewer Current number . d. 82 units at which MC < MB: (Click to select) More Fewer Current number . e. 5 units at which MB < MC
1.Explain how a firm uses resources price and value data to determine the appropriate combination of capital and labor resources to use in order to maximize profits. 2.how does this change when the firm want to produce a specific quantity of product with the least cost combination of resources? 3. if a software firm estimates that the MP of labor is 3 apps per month and the price is labor is $1100 per month, while the MP of capital is 5apps per month and its price is $2000, should the firm hire more labor and decrease its capital use or increase its use of capital and use fewer labor resources?
Economics This question related with Linear Programming Course 2-A firm produces two different products; Alpha and Beta, and each product is produced after a three stage manufacturing process; assembly, paint and packaging. The time available for these manufacturing stages is limited and the firm has 1,000 minutes of assembly time, 500 minutes of paint and 1,200 minutes of packaging time available each week. Manufacturing times required for the products are given in the table below. Alpha (mins) Beta(mins) Assembly 2 1 Paint 1 1 Packaging 4 1 It is also known that market conditions will limit the sale of Alpha product to 300 or less each week. Total cost of producing Alpha is 12TL each and for Beta 13TL each. Selling price of Alpha is 18TL each and for Beta 17TL each. a) As the manager of this firm, formulate a linear programming model to maximize weekly profit. b) Solve the linear programming model graphically.
Factors of production are A) the mathematical calculations firms make in determining their optimal production levels. B) social and political conditions that affect production. C) the physical relationships between economic inputs and outputs. D) inputs into the production process.
10 - You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is the true cost of going skiing? Now suppose that you had been planning to spend the day studying at the library. What is the cost of going skiing in this case? (Answer the question according to the definition of opportunity cost.) (5 points)
Blake&Sons run a business of manufacturing animal trackers in Lansing, Michigan. It employs a total of 60 workers for $30 per hour wage rate. Expenses incurred on materials including metal and wiring sum up to $2800. Miscellaneous costs like energy and infrastructure are half of material costs.In January, the firm produced 10,000 trackers, with each employee working for 10 hours. If each tracker is sold for $20, find the following:a) Labor productivity per hourb) Labor productivity per dollarc) Multifactor productivity (Output income)d) Multifactor productivity (Output units)
Suppose you work for United Airlines. You have been assigned to conduct a cost-benefit analysis for United Airlines on the question of whether or not United should offer service from Lynchburg Regional Airport to Washington Dulles International Airport (DC-Northern Virginia area). Stopping short of doing any actual calculations, discuss what would be involved in doing this analysis for United. (Even though you don’t have to do the actual calculations, you should be specific as to how you would do the calculations and obtain the necessary inputs.)
The amount of fish caught per week on a trawler is a function of the crew size assigned to operate the boat. Based on past data, the following production schedule was developed: Crew size 2 3 4 5 6 7 8 9 10 11 12Fish caught (100 lbs/week) 3 6 11 19 24 28 31 33 34 34 33 b) How large a crew should be used if the trawler owner is interested in maximizing the total amount of fish caught?c) How large a crew should be used if the trawler owner is interested in maximizing the average amount of fish caught per person?d) Suppose the owner can sell all the fish caught for $75 per 100 pounds and can hire as many crew members as desired by paying them $150 per week. Assuming that the owner of the trawler is interested in maximizing profits, determine the optimal crew size.
MICROECONOMICS Walmart is raising starting salaries for its truck drivers to between $95,000 and $110,000 a year, up from an average starting salary of $87,000, said a Walmart spokeswoman. The push comes as the trucking industry continues to grapple with challenges in recruiting drivers throughout the pandemic. Walmart and other large retailers have grown significantly by revenue during the Covid-19 pandemic as demand for items including household goods and building materials soared, creating the need for drivers. Which graph number best fits the problem? AND Fill in the chart for Truck Drivers using a ⬆(increase) or ⬇(decrease) Pe ? Qe ? ∆ in D ? ∆ in Qd ? ∆ in S ? ∆ Qs ?
Specify and explain the typical shapes of marginal-benefit and marginal-cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product? Explain.