Good U Good Z (unit) (unit) 1750 100 1700 200 1650 300 1580 400 1480 500 1300 600 1090 700 850 800 590 900 300 1000 Table 2.1 a. Demonstrate the production of the two goods based on Table 2.1 on a graph paper, with Good U on the x-axis and Good Z on the y-axis. b. Compute the marginal rate of product transformation (MRPT) when output level of Good U increases from one level to another (0 to 1000 units). c. What is the opportunity cost per unit when the output level of Good U increases from 700 units to 800 units?

Good U Good Z (unit) (unit) 1750 100 1700 200 1650 300 1580 400 1480 500 1300 600 1090 700 850 800 590 900 300 1000 Table 2.1 a. Demonstrate the production of the two goods based on Table 2.1 on a graph paper, with Good U on the x-axis and Good Z on the y-axis. b. Compute the marginal rate of product transformation (MRPT) when output level of Good U increases from one level to another (0 to 1000 units). c. What is the opportunity cost per unit when the output level of Good U increases from 700 units to 800 units?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 23P: HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow...

See similar textbooks

Similar questions

4. A bottling company uses two inputs to produce bottles soft drink sludge: bottling machines (K) and workers(L). The machine costs $1000 per day (r) to run and the workers are paid $200 per day (w). At the current level of production, the marginal product of the machine is an additional 200 bottles per day (MPK), and the marginal product of labor is 50 bottles per day (MPL). a. State the rule for determining the cos- efficient combinations of inputs (K & L) for the production of soft drinks. b. Given r=$1000 per day, w=$200 per day, (MPK)= 200 bottles, and (MPL)= 50 bottles, is the company operating cost-efficiently? c. What must the company do to move toward cost-efficient operation? Hint: use more labor or more machines and why?
7) A company with production technology y = K 0.5. L 0.5, where y, Ki L are, respectively, the units of product, capital and labor. If the price of a unit of work is € 5 and that of a unit of capital is € 2.5 and the company is using 100 units of capital and 25 units of labor then Choose one: A. We cannot make any claims as to whether or not the company is producing efficiently B. We can say that the company is producing inefficiently: It uses too much capital C. The combination of labor and capital is not achievable by the company D. We can say that the company is producing inefficiently: it uses too much work E. We can say that the company is producing efficiently
COURSE: MICROECONOMICS - PRODUCTION THEORY Suppose a company engaged in manufacture of wheat whose production function is represented by: Q =10KL.In addition, firm must pay wages of $200 and rent on capital is $600. It is known that firm has a budget of $30,000 for cheese production.a) Calculate break-even point of both factors of production and graph itb) What will happen if minimum wage is now fixed at $300? Graph itc) Assuming that new minimum wage at point b) is maintained and, assuming that investor demands a capital rent of $900, explain what happens to optimal factor level. Graph it
What is production efficiency and product mix efficiency? What is the main condition for each type of these efficiencies.
A commercial fisherman notices the followingrelationship between hours spent fishing and thequantity of fish caught:HoursQuantity of Fish(in pounds)0 hours 0 lb.1 102 183 244 285 30a. What is the marginal product of each hour spentfishing?
7 4. Profesör Çabuk homotetik bir fonksiyonu γ’ıncı dereceden homojen bir fonksiyonun monotonik artan bir fonksiyonu olarak tanımlamaktadır. Profesör Varian ise homotetik bir fonksiyonu birinci dereceden homojen bir fonksiyonun monotonik artan bir fonksiyonu olarak tanımlamaktadır. Hangisi doğrudur ve niçin?
Owner owns a pizza shop with a single employee. If employee works x hours, he can produce sqrt x pizzas.Each pizza sells for £6. cost to employee of working x hours is c(x)=x. If emplyee can enjoy £5 from staying at home and no effort. How much would he have to receive from owner for producing effecient amount of pizzas? a)14 b)36 c)27 d)42 e)9
Assume that your company produces two goods: laptops and tablets. Assume aslo that your company has limited resources( including time) to devote to producing these items. Now assume that the laptop team does something to improve the efficiency of making laptops, while the tabley holds to old methods. Given the change you can a) only increase your production of laptops b) only increase your production of tablets c) increase production of both items d) not increase your production in either tablets or laptops.
An SMSE has a production process with fixed lot size A. The table belowshows the total output and the number of workers:No. of Workers (L) Total Output (Q) 0 0 1 10 2 30 3 50 4 56 5 59 6 60 7 60 8 58(a) Determine marginal productivity of labour and average productivity oflabour for each unit of labour. (b) Show the three stages of production (c) Suppose the market price of the output Rs. 150 and the wage rate isRs. 900, how many workers would this firm hire? What if the pricedecreases to Rs. 100?(d) Suppose the market price increases to Rs. 250, what is the highestwage rate the firm would be willing to pay to…
2. Thor runs a business called Heavy Hammers, which produces some of the heaviest hammers you’ve ever seen! He uses two inputs in the production of hammers: labour, denoted by L, and capital, denoted by K. Heavy Hammers produces hammers, denoted by H, according to the following production technology: H = f(L,K) = L12 K14 . Thor must pay each unit of labour a wage rate w and is able lease his capital equipment at r dollars per unit. The market price of hammers is $4. (a) Write down Thor’s profit maximization problem. (b) Write down and equation that sets the marginal product of labour equal to the wage rate of labour, w. Then write down and equation that sets the marginal product of capital equal to the lease rate, r. 2 (c) Solve the two equations from part (b) for the two unknown inputs L and K. Your solutions give the profit-maximizing choices of labour and capital as functions of the wage and lease rates, w and r. (d) If the wage is 2, and the lease rate is 1, how…
The nation of Ectenia has 20 competitive appleorchards, all of which sell apples at the world priceof $2 per apple. The following equations describethe production function and the marginal product oflabor in each orchard:100100 2 ,2 5 25 2Q L LMPL Lwhere Q is the number of apples produced in a day,L is the number of workers, and MPL is the marginalproduct of labor.a. What is each orchard’s labor demand as a functionof the daily wage W? What is the market’s labordemand?b. Ectenia has 200 workers who supply their laborinelastically. Solve for the wage W. How manyworkers does each orchard hire? How much profitdoes each orchard owner make?c. Calculate what happens to the income of workersand orchard owners if the world price doubles to$4 per apple.d. Now suppose that the price is back at $2 perapple but a hurricane destroys half the orchards.Calculate how the hurricane affects the income ofeach worker and of each remaining orchard owner.What happens to the income of Ectenia as a whole?
Define the concept of free disposal of inputs.Does it apply anywhere in this problem?