The Cobb-Douglas production function for a particular product is N(xy) = 80x"y where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product Each unit of labor costs $80 and each unit of capital costs $120. Answer the questons (A) and (B) below (A) II S800,000 is budgeted for production of the product, determino how that amount should be allocated to maxomize production, and find the maximum production (B) Find the marginal productivity of money in this case, and estimate the increase in production if an addtional $50,000 is budgeted for the production of the product. (A) II S800,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maxmum production Production will be maximized when using units of labor and units of capital The maximum production is approximately units (Round to the nearest integer as needed.) (B) Find the marginal productivity of money in this case, and estimate the increase in production if an additional $50,000 is budgeted for the production of the product The marginal productivity of money is approxmately

The Cobb-Douglas production function for a particular product is N(xy) = 80x"y where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product Each unit of labor costs $80 and each unit of capital costs $120. Answer the questons (A) and (B) below (A) II S800,000 is budgeted for production of the product, determino how that amount should be allocated to maxomize production, and find the maximum production (B) Find the marginal productivity of money in this case, and estimate the increase in production if an addtional $50,000 is budgeted for the production of the product. (A) II S800,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maxmum production Production will be maximized when using units of labor and units of capital The maximum production is approximately units (Round to the nearest integer as needed.) (B) Find the marginal productivity of money in this case, and estimate the increase in production if an additional $50,000 is budgeted for the production of the product The marginal productivity of money is approxmately

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

For the production of part R-193, two operations are being considered. The capital investment associated with each operation is identical. Operation 1 produces 2,000 parts per hour. After each hour, the tooling must be adjusted by the machine operator. This adjustment takes 20 minutes. The machine operator for Operation 1 is paid $20 per hour (this includes fringe beneﬁts). Operation 2 produces 1,750 parts per hour, but the tooling needs to be adjusted by the operator only once every two hours. This adjustment takes 30 minutes. The machine operator for Operation 2 is paid $11 per hour (this includes fringe beneﬁts). Assume an 8-hour workday. Further assume that all parts produced can be sold for $0.40 each. Should Operation 1 or Operation 2 be recommended?
Whimsical Toys A US-based designer and manufacturer of wimsical, high quality, wooden toys is looking to expand manufacturing capacity to service its growing domestic demand. The company currently owns one manufacturing facility in North Carolina and is considering either building onto this facility or sourcing some of its production from Mexico. If it sources from Mexico, the company must further consider whether to own this facility or outsource this fraction of its production to another company. Labor cost as a % of total bill of materials cost at the North Carolina site is currently 30% for a typical wooden toy and the average wage of workers in the plant is $27/hour. The average wage of workers doing similar work in Mexico is $4.50/hour. If the labor costs remain the same as described above, what percent of product cost results in no cost difference between production in US and Mexico? a. 0% b. 18% c. 20% d. 22%
A plant has sufficient capacity to manufacture any combination of four different products (A, B, C, D). For each product, time is required to be invested in four different machines, which is expressed in hours per kilogram of product, as shown in the following table as shown in the following table: (attached image) Each machine has an availability of 60 hours per week. Products A, B, C and D can be sold at $9, $7, $6 and $5per kilo, respectively. Variable labor costs are $2 per hour for machines 1 and 2, and $3 per hour for machines 3 and 4. The material costs for each kilogram of product A are $4. The material costs for each kilogram of products B, C, D and D are $4 each kilogram of products B, C and D are $1. What needs to be done:Formulate a profit-maximizing PL model given the maximum demand per product shown in the table (there are 16 variables). Note: Do it by hand, no computer
Show that the two-input CES production(attached) has DRS, CRS, or IRS depending on whether B (beta) is smaller than, equal, or greater than 1.
Zabrina has started her own company, Lockey, which manufactures imprinted jeans. Since he just begun this operation, he rents the equipment from a local printing shop when necessary. The cost of using the equipment is P3,000. The materials used in one jean cost P200, and he can sell it at 350. Requirements: Provide for a mathematical model that will show how to maximize the profit.
Pipes R Us has designed a pipeline that provides a throughput of 70,000 gallons of water per 24-hour period. If the diameter of the pipeline were increased by 1 inch, throughput would increase by 4,000 gallons per day. Alternatively, throughput could be increased by 6,000 gallons per day using the original pipe diameter with pumps that had 100 more horsepower. a. Estimate the marginal rate of technical substitution between pump horsepower and pipe diameter. b. Assuming the cost of additional pump size is $6 per each unit of horsepower and the cost of larger diameter pipe is $200 per inch, does the original design exhibit the property required for optimal input combinations? Why or why not?
At the beginning of the year, managers at King Industries estimated $420000 in manufacturing overhead, 20000 direct labor hours and 50000 machine hours. Actual manufacturing costs at the end of the year were $425000 in manufacturing overhead. During the year, 22000 direct labor hours and 47000 machine hours were incurred. If overhead is applied based on direct labor hours, what is the predetermined overhead rate for the coming year? $21.00 per direct labor hour $8.40 per direct labor hour $19.09 per direct labor hour $9.04 per direct labor hour
S1. A firm's production function is well described by the equation Q21-0112 + 3K -02K2. Input prices are $10 per labor hour and $20 per machine hour, and the firm sells its output at a fixed price of $10 per unit. a. In the short run, the firm has an installed capacity of K = 50 machine hours per day, and this capacity cannot be varied. Create a spreadsheet ( based on the example below) to model this production setting.
The manufacturer produces certain items at a labor cost per unit of 315, material cost per unit is P 100, variable cost of P 3.00 each. If the item has a selling price of P 995, how many units must be manufactured each month for the manufacturer to break-even if the monthly overhead is P 461,600?
A manufacturer produces certain items at a labor cost of P 115 each, material cost of P 76 each and variable cost of P 2.32 each. If the item has a unit price of P 600, how many units must be manufactured each month for the manufacturer to break-even if the monthly overhead is P 428,000.
If you know that with 10 units of output, average fixed cost is OMR 22.50 per unit and average variable cost is OMR 51.25 per unit, then average cost of each unit is: a. OMR 73.75. b. OMR 225. c. OMR 512. d. OMR 28.75.
The making of rivet holes in structural steel members can be done by 2 methods. The first method consists of laying out the position of the holes in the members and using a drill press costing P100k. The machinist is paid P60 per hour and he can drill 80 holes per hour. The second method makes use of a multiple-punch machine costing P80k. The punch operator is paid P40 an hour and he can punch out 1 hole for 3 seconds. This method also requires an expense of P1.25 per hole to set the machine. How many hours will it take the Multiple Punch Machine to finish the 10k holes. a. 92 b. 8.3 c. 0.92 d. 8.9