Principles Of Microeconomics, Student Value Edition Plus New Myeconlab With Pearson Etext -- Access Card Package (11th Edition)
11th Edition
ISBN: 9780133456301
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 7, Problem 6P
To determine
Alternative combination of capital and labor.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is the difference between the labor intensive production and capital intensive production approach.
A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method choices are:
Method 1: 50 units of labor, 10 units of capital
Method 2: 20 units of labor, 40 units of capital
Method 3: 10 units of labor, 70 units of capital
Question
If hiring labor for the winter costs $100/unit and a unit of capital costs $400, what is the best production method? What method should the company use if the cost of labor rises to $200/unit?
A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method choices are:
Method 1: 50 units of labor, 10 units of capital
Method 2: 20 units of labor, 40 units of capital
Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs $400, what is the best production method? What method should the company use if the cost of labor rises to $200/unit?
Chapter 7 Solutions
Principles Of Microeconomics, Student Value Edition Plus New Myeconlab With Pearson Etext -- Access Card Package (11th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Describe where the law of diminishing marginal productivity begins for We R' Write. We R' Write currently uses 75 workers on the production line per day. Given the calculations in the table, is this number optimal? Why, or why not? If you could make a suggestion regarding the optimal number of workers We R' Write should use on the production line, what would it be? Why? Number of Workers per Day Pens Produced per Day  Average Product  Marginal Product   Price per Pen Total Value Product Average Value Product Marginal Value Product Price of Worker per Day 0 0 --- --- $3.50 $0.00 --- --- $560 15 1,000 66.67 67 $3.50 $52.50 $233.33 $233.33 $560 30 2,700 90.00 113 $3.50 $105.00 $315.00 $396.67 $560 45 5,100 113.33 160 $3.50 $157.50 $396.67 $560.00 $560 60 7,900 131.67 187 $3.50 $210.00 $460.83 $653.33 $560 75 12,000 160.00 273 $3.50 $262.50 $560.00…arrow_forwardWe often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain. For such production technologies, the marginal product of labor is increasing so long as the slope of the production frontier becomes steeper as we move toward more (we are increasing) the labor input.arrow_forwardEM.19   Billy is an economics student and can use a practice exam to test his knowledge. After one hour of studying, he scores 50% on the exam.  After two hours, he scores 75%.  After three hours, he scores 85%.  After four hours, he scores 90%.  What economic concept is most clearly illustrated here?  a diminishing marginal returns b worker fatigue c input inefficiency d opportunity costarrow_forward
- Discuss Factor Abundance, and Economies of Scale In detail.arrow_forwardall possible combinations of labor and capital inputs at a given budget and prices of labor and capital is shown in choices -Isocost -Isoquant -Production possibility curve -production planarrow_forwardIn your "toast" production function, you used your labor and a toaster as capital. Keeping capital constant, i.e., with only one toaster if you keep adding the labor, i.e., bring your friends to help you with making toasts, which of the following might happen? Group of answer choices Marginal returns to labor will be a constant. Marginal returns to labor will keep decreasing and, after a point, it will become negative. Marginal returns to labor will keep increasing. Marginal returns to labor will keep increasing and then be a constant.arrow_forward
- ***There are FOUR parts to the question, all based around the same given data...please answer and explain each and note where graphs are needed***  Given: A farmer raises apples using land (K) and labor (L), and has an output of ?(?,?)= ?0.5?0.5 bushels of apples.   a. Find several input combinations that give the farmer 6 bushels of apples. Sketch the associated isoquant on a graph, with L on the x-axis and K on the y-axis.  b. In the short run, the farmer only has 4 units of land. What is his short-run production function? Graph it for values of L from 0 to 16, with L on the x-axis and output on the y-axis. What is the name of the slope of this curve?  c. Assuming the farmer still only has 4 units of land, how much extra output does he get from adding 1 extra unit of labor if he is already using only 1 unit of labor? How much extra output does he get from adding 1 extra unit of labor if he is already using 4 units of labor?   d. In the long run, the farmer can change both his…arrow_forwardThe following table shows data on the average number of customers processed by the service units of three local banks (A, B and C) each day. The hourly wage rate is R30, the overhead rate is 1.1 times labour cost, and material costs is R20 per customer. Service Unit Number of employees Customers processed per day Bank A Bank B Bank C 4 5 8 36 40 80 1.Compute the labour productivity and the multifactor productivity for each unit. Use an eight-hour day for multifactor productivity.2. Suppose a new, more standardized procedure is to be introduced that will enable each employee to process one additional customer per day. Compute the expected labour and multifactor productivity rate for each bankarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning