a. Under autarky (in absence of trade), a unit cost of labor (w) is $40 and a unit cost of capital (r) is $20 in the U.S. Draw the minimum-total-cost isocost line to produce 100 units of vaccines and label it as "(w/r)us" on the isoquant diagram of vaccines, attached to this instruction sheet. Indicate an optimal point on your diagram and label it as "US". At the optimal point, how many units of labor and capital will be used?
a. Under autarky (in absence of trade), a unit cost of labor (w) is $40 and a unit cost of capital (r) is $20 in the U.S. Draw the minimum-total-cost isocost line to produce 100 units of vaccines and label it as "(w/r)us" on the isoquant diagram of vaccines, attached to this instruction sheet. Indicate an optimal point on your diagram and label it as "US". At the optimal point, how many units of labor and capital will be used?
Chapter2: Mathematics For Microeconomics
Section: Chapter Questions
Problem 2.15P
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a. Under autarky (in absence of trade), a unit cost of labor (w) is $40 and a unit cost of capital (r) is $20 in the U.S.
Draw the minimum-total-cost isocost line to produce 100 units of vaccines and label it as "(w/r)us" on the isoquant diagram of vaccines, attached to this instruction sheet. Indicate an optimal point on your diagram and label it as "US". At the optimal point, how many units of labor and capital will be used?
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