Market constraintHourly wage of workers in theindustryThe number of other firms sellingsimilar productsThe number of buyers in themarketTechnology constraintCost per pound of limestoneCost per hour of keeping thefurnace at the requiredtemperatureMaximum amount of output perhour that can be producedCost per pound of sand Consider a firm that produces glass. Glass production involves melting sand, soda ash, and limestone at a very high temperature.Consider the following factors that a glass manufacturer faces, and determine whether each represents a technological constraint or amarket constraint:* Items (7 items) (Drag and drop into the appropriate area below)

A constraint restricts or prohibits the success of a particular production procedure. According to…

Market constraint Hourly wage of workers in the industry The number of other firms selling similar products The number of buyers in the market x Technology constraint Cost per pound of limestone Cost per hour of keeping the furnace at the required temperature Maximum amount of output per hour that can be produced Cost per pound of sand

Market constraint Hourly wage of workers in the industry The number of other firms selling similar products The number of buyers in the market x Technology constraint Cost per pound of limestone Cost per hour of keeping the furnace at the required temperature Maximum amount of output per hour that can be produced Cost per pound of sand

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 14P

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The production engineers at Impact Industries have derived the optimal combinations of labor and capital. These are the only two inputs used by Impact. The following chart shows the combinations of labor and capital for three levels of output. Q is the output level. L* is the optimal amount of labor. K* is the optimal amount of capital. The price of labor is $90 per unit. The price of capital is $15 per unit. Q L* K* 120 5 20 180 7 7 240 12 24 a) If the manager of Impact Industries decides to produce 120 units, what will the long-run total cost and long-run average cost of producing 120 units? Show all calculations. b) If the manager of Impact Industries decides to produce 180 units, what will the long-run total cost and long-run average cost of producing 180 units? Show all calculations. c) If the manager of Impact Industries decides to produce 240 units, what will the long-run total cost and long-run average cost of producing 240…
The production engineers at Impact Industries have derived the optimal combinations of labor and capital. These are the only two inputs used by Impact. The following chart shows the combinations of labor and capital for three levels of output. Q is the output level. L* is the optimal amount of labor. K* is the optimal amount of capital. The price of labor is $90 per unit. The price of capital is $15 per unit. Q L* K* 120 5 20 180 7 7 240 12 24 a) If the manager of Impact Industries decides to produce 120 units, what will the long-run total cost and long-run average cost of producing 120 units? Show all calculations. b) If the manager of Impact Industries decides to produce 180 units, what will the long-run total cost and long-run average cost of producing 180 units? Show all calculations. c) If the manager of Impact Industries decides to produce 240 units, what will the long-run total cost and long-run average cost of producing 240…
The production engineers at Impact Industries have derived the optimal combinations of labor and capital. These are the only two inputs used by Impact. The following chart shows the combinations of labor and capital for three levels of output. Q is the output level. L* is the optimal amount of labor. K* is the optimal amount of capital. The price of labor is $90 per unit. The price of capital is $15 per unit. Q L* K* 120 5 20 180 7 7 240 12 24 a) If the manager of Impact Industries decides to produce 120 units, what will the long-run total cost and long-run average cost of producing 120 units? Show all calculations. b) If the manager of Impact Industries decides to produce 180 units, what will the long-run total cost and long-run average cost of producing 180 units? Show all calculations.
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Hannah and Sam run Moretown Makeovers, a home remodeling business. The number of square feet they can remodel in a week is described by the Cobb-Douglas production function Q=F(L,K) Q=10L^0.25 K^0.25 where L is their number of workers and K is units of capital. The wage rate is $500 per week and a unit of capital costs $500 per week. Suppose that when initially producing 10 square feet a week, they use 1 unit of capital.a. What is their short-run cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ b. What is their short-run average cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ c. What is their long-run cost of remodeling 80 square feet per week? Instructions: Round your answer to the nearest whole number. $ d. What is their long-run average cost of remodeling 80 square feet per week? Instructions: Round your answer…
A firm produces a good using two inputs, capital (K) and labour (L). For every unit of output being produced, the ratio of capital to labour must be , where is a positive parameter. Meanwhile, the total cost of production must equal $1,000. If the rental rate of capital is $20 per unit of capital, and the hourly wage is $10 per unit of labour, how much capital does the firm use for it production? a) k=100a/(2/a+1) b) k=100/a(2a+1) c) k=100/(2/a+1) d) k=100/(2a+1)