Alex uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{L/4, K^0.8}. If he uses 1 kg of wool and 3 hours of labour, he can produce 1 t-shirt. 1. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axis and wool on vertical. 2. Given that the price of labour is w=$10 and the price of each kg of wool is p=$6

Alex uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{L/4, K^0.8}. If he uses 1 kg of wool and 3 hours of labour, he can produce 1 t-shirt. 1. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axis and wool on vertical. 2. Given that the price of labour is w=$10 and the price of each kg of wool is p=$6

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.1P

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