Economics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
7th Edition
ISBN: 9780134833392
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11.A, Problem 6PA
To determine
Changing input prices and cost-minimizing input choice.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Exhibited in the table below are the two isoquants and the isocost for a hypothetical firm
Â
A
B
C
D
E
F
Labor
40
28
18
10
4
0
Capital
1
2
3
4
5
6
Labor
80
38
28
20
14
10
Capital
1
2
3
4
5
6
Â
Labor (P2/unit)
25
20
15
10
5
0
Capital
(P5/unit)
0
2
4
6
8
10
In a single graph, please perform the following:
A. Draw the Isoquant curve
B. Draw the isocost
C. Identify the optimal point which is tangent to the isoquant line. Please mark the spot as X.
D. How many units of capital and labor is the optimal combination
The formal study of economics began when Adam Smith (1723-1790) published his famous book The Wealth of Nations in 1776. In the first chapter of The Wealth of Nations, Smith introduces the idea of the division of labor. Define "division of labor" and illustrate with an example.
Briefly explain using a graph whether given statement is true or false. “Red Stone Creamery currently hires 5 workers. When it added a sixth worker, its output actually fell. This means that the sixth worker is not as skilled as the fifth worker.
Chapter 11 Solutions
Economics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
Ch. 11.A - Prob. 1RQCh. 11.A - Prob. 2RQCh. 11.A - Prob. 3RQCh. 11.A - Prob. 4PACh. 11.A - Prob. 5PACh. 11.A - Prob. 6PACh. 11.A - Prob. 7PACh. 11.A - Prob. 8PACh. 11.A - Prob. 9PACh. 11.A - Prob. 10PA
Ch. 11.A - Prob. 11PACh. 11.A - Prob. 12PACh. 11.A - Prob. 13PACh. 11.A - Prob. 14PACh. 11.A - Prob. 15PACh. 11 - Prob. 11.1.1RQCh. 11 - Prob. 11.1.2RQCh. 11 - Prob. 11.1.3PACh. 11 - Prob. 11.1.4PACh. 11 - Prob. 11.1.5PACh. 11 - Prob. 11.2.1RQCh. 11 - Prob. 11.2.2RQCh. 11 - Prob. 11.2.3RQCh. 11 - Prob. 11.2.4RQCh. 11 - Prob. 11.2.5PACh. 11 - Prob. 11.2.6PACh. 11 - Prob. 11.2.7PACh. 11 - Prob. 11.2.8PACh. 11 - Prob. 11.2.9PACh. 11 - Prob. 11.2.10PACh. 11 - Prob. 11.2.11PACh. 11 - Prob. 11.2.12PACh. 11 - Prob. 11.3.1RQCh. 11 - Prob. 11.3.2RQCh. 11 - Prob. 11.3.3PACh. 11 - Prob. 11.3.4PACh. 11 - Prob. 11.3.5PACh. 11 - Prob. 11.3.6PACh. 11 - Prob. 11.3.7PACh. 11 - Prob. 11.3.8PACh. 11 - Prob. 11.3.9PACh. 11 - Prob. 11.4.1RQCh. 11 - Prob. 11.4.2RQCh. 11 - Prob. 11.4.3RQCh. 11 - Prob. 11.4.4PACh. 11 - Prob. 11.4.5PACh. 11 - Prob. 11.4.6PACh. 11 - Prob. 11.4.7PACh. 11 - Prob. 11.4.8PACh. 11 - Prob. 11.4.9PACh. 11 - Prob. 11.4.10PACh. 11 - Prob. 11.5.1RQCh. 11 - Prob. 11.5.2RQCh. 11 - Prob. 11.5.3PACh. 11 - Prob. 11.5.4PACh. 11 - Prob. 11.5.5PACh. 11 - Prob. 11.5.6PACh. 11 - Prob. 11.5.7PACh. 11 - Prob. 11.5.8PACh. 11 - Prob. 11.5.9PACh. 11 - Prob. 11.6.1RQCh. 11 - Prob. 11.6.2RQCh. 11 - Prob. 11.6.3RQCh. 11 - Prob. 11.6.4RQCh. 11 - Prob. 11.6.5RQCh. 11 - Prob. 11.6.6PACh. 11 - Prob. 11.6.7PACh. 11 - Prob. 11.6.8PACh. 11 - Prob. 11.6.9PACh. 11 - Prob. 11.6.10PACh. 11 - Prob. 11.6.11PACh. 11 - Prob. 11.6.12PACh. 11 - Prob. 11.6.13PACh. 11 - Prob. 11.1CTECh. 11 - Prob. 11.2CTECh. 11 - Prob. 11.3CTECh. 11 - Prob. 11.4CTE
Knowledge Booster
Similar questions
- A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught: Hours Quantity of Fish (Pounds) 0 0 1 11 2 20 3 25 4 28 5 30 Complete the following table with the marginal product of each hour spent fishing. Hours Quantity of Fish Marginal Product (Pounds) (Pounds) 0 0   1 11  2 20  3 25  4 28  5 30  Graph #1 On the following graph, use the blue points (circle symbol) to graph the fisherman's production function. (graph #1 blue point = Prodution function) The production function becomes ( flatter , steeper ) ?  as the number of hours spent fishing increases.  The fisherman has a fixed cost of $12 (his pole). The opportunity cost of his time is $6 per hour.  Graph #2 On the following graph, use the green points (triangle symbol) to graph the fisherman's total-cost curve at the following quantities of fish: 0, 11, 20, 25, 28,…arrow_forwardFill in the table Total, Average, and Marginal Product of a Soap Manufacturer Number of Workers Total Output per day Average Product Marginal Product 1 50 bars 50 50 2 125 62.5 75 3 220 73.33 95 4 320 80 100 5 410 82 90 6 490 81.67 80 7 560 80 70 8 610 76.25 50 9 640 71.11 30 10 630 63 -10 Using the data in the table, graph and explain the following: Total Output Average Product Marginal Productarrow_forwardQ3) A chair manufacturer hires its assembly-line labor for $30 an hour and calculates that the rental cost of its machinery is $15 per hour. Suppose that a chair can be produced using 4 hours of labor or machinery in any combination. Graphically illustrate the isoquant and the two isocost lines for the current combination of labor and capital and for the optimal combination of labor and capital.arrow_forward
- Isoquant curves and isocost curves are tools that can explain how a firm might best respond to changes in the production environment. Present an example of an isocost curve where labor and capital are the two inputs, and explain what it is using language someone not trained in economics could understand. Present an example of an isoquant in the same diagram you used for your isocost curve, and draw the isoquant so it cuts the isocost curve twice. Explain what an isoquant is using language someone not trained in economics could understand. Label the two points A and B, where the isocost and isoquant curves intersect. Present a logical argument that explains why the firm should operate neither at point A nor point B, and present a point that would be optimal by drawing a new isoquant curve in the diagram. Add a second isocost curve to your diagram such that the firm is spending more money on inputs. Add a third isoquant to your diagram to show a firm that would become more capital…arrow_forwardJanica and Jency live in the beach town of Santa Monica. They own a small business in which they make wristbands and pot holders and sell them to people on the beach. As shown in the table on the following page, Janica can make 15 wristbands per hour but only 3 pot holders. Jency is a bit slower and can make only 12 wristbands or 2 pot holders in an hour.   Wristband (output per hr) Pot Holders (output per hr) Janica 15 3 Jency 12 2  If Janica devoted half of her time (10 out of 20 hours) to wristbands and half of her time to pot holders, how many of each would she produce in a week? If Jency did the same, how many of each would she produce? How many wristbands and pot holders would be produced in total? Please answer with explanation.arrow_forwardConsider the graph showing the production function for coffee houses. The graph shows how output per worker increases as the amount of capital each worker has to use increases, other things being equal. The owners of Joe's Java and Cathy's Coffee are each considering adding another espresso machine. Joe's Java is currently operating at point A, where the new machine would move Joe's Java to point B. Cathy's Coffee is operating at point C and the new machine would move them to point D. Which of the choices is not held constant when moving from left to right along the curve? the amount of capital used in relation to the number of workers the level of technology that the capital employs the skill of the workers the amount of natural resources available for the workers to usearrow_forward
- Briefly explain  (a) Why the producer prefers stage 2 in production process.arrow_forwardIn an article in the New York Times (Is Junk Food Really Cheaper? September 24, 2011), Mark Bittman compares the cost of a McDonalds meal for four ($28) to the cost of a home cooked chicken with vegetables dinner ($13.78). An economist would say that the "true" cost of the home cooked meal is than $13.78, as we need to add to the cost of groceries (money you pay to buy the ingredients chicken and vegetables) also the lower, amount of money you will be saving when you spend less money on food. lower, negative health effects of eating too much fast food lower, opportunity cost of time you spend to prepare and cook your dinner. higher, benefits of healthy home. cooking, higher, opportunity cost of time you spend to prepare and cook your dinner.arrow_forwardBriefly explain the term incremental innovations. Which companies in terms of the size (small, medium, large size) have more economic incentives to produce these?arrow_forward
- Upscale hotels in the United States recently cut their prices by 20 percent in an effort to bolster dwindling occupancy rates among business travelers. A survey performed by a major research organization indicated that businesses are wary of current economic conditions and are now resorting to electronic media, such as the Internet and the telephone, to transact business. Assume a company’s budget permits it to spend $5,000 per month on either business travel or electronic media to transact business. Graphically illustrate how a 20 percent decline in the price of business travel would impact this company’s budget set if the price of business travel was initially $1,000 per trip and the price of electronic media was $500 per hour. Suppose that, after the price of business travels drops, the company issues a report indicating that its marginal rate of substitution between electronic media and business travel marginal rate of substitution between electronic media and business…arrow_forwardbriefly Define the Law of Diminishing Marginal Returns and giving a clear example, explain why this“Law” is important in Economics.arrow_forwardDavis Florist has two employees, Anita and Jerome, and two tasks that need to be completed, floral arrangements and floral delivery. It takes Anita 30 minutes to finish one floral arrangement and 40 minutes to make a delivery. It takes Jerome 10 minutes to finish one floral arrangement and 30 minutes to make a delivery. Each worker works six hours per day. a. Suppose that, initially, both Jerome and Anita spend four hours each day doing floral arrangements and two hours each day doing deliveries. Now suppose they change their tasks, so that each individual does nothing but the task in which she or he has a comparative advantage. How many more floral arrangements and deliveries could they produce each day?  ________ additional floral arrangements  _________ additional deliveriesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education