Part 1 A firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cob y = f(L, K) = L0.25 K0.75 Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical isoquant when L- 120 and K - 60? Give your answer to two decimal places and remember tbat t
Part 1 A firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cob y = f(L, K) = L0.25 K0.75 Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical isoquant when L- 120 and K - 60? Give your answer to two decimal places and remember tbat t
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 8P
Related questions
Question
![Economics
Part 1
O See Hint
A firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cobb-Douglas production function:
y = f(L, K) = L0.25 K0.75
Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical axis, what is the slope of this firm's
isoquant when L = 120 and K = 60? Give your answer to two decimal places and remember that the sign matters when describing
the slope of an isoquant.
Part 2
O See Hint
Assume that L = 120 and K = 60 and suppose that the firm decides to reduce its use of capital and replace those machine hours with
some additional labor hours. Approximately how many labor hours will the firm need to add for each machine hour it cut in order to
maintain the same level of output (i.e., stay on the same isoquant)? Give your answer to two decimal places. I
labor hours](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F52a99854-117c-4c49-8d9e-af33e7986dce%2F8fcfe84b-e610-4d29-ac20-a17557070786%2Fw2lov2d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Economics
Part 1
O See Hint
A firm produces output (y) using two inputs, labor (L) and capital (K), according to the following Cobb-Douglas production function:
y = f(L, K) = L0.25 K0.75
Assuming that we draw the isoquant map with labor on the horizontal axis and capital on the vertical axis, what is the slope of this firm's
isoquant when L = 120 and K = 60? Give your answer to two decimal places and remember that the sign matters when describing
the slope of an isoquant.
Part 2
O See Hint
Assume that L = 120 and K = 60 and suppose that the firm decides to reduce its use of capital and replace those machine hours with
some additional labor hours. Approximately how many labor hours will the firm need to add for each machine hour it cut in order to
maintain the same level of output (i.e., stay on the same isoquant)? Give your answer to two decimal places. I
labor hours
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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.Recommended textbooks for you
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![ECON MICRO](https://www.bartleby.com/isbn_cover_images/9781337000536/9781337000536_smallCoverImage.gif)
![Exploring Economics](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
![ECON MICRO](https://www.bartleby.com/isbn_cover_images/9781337000536/9781337000536_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Microeconomics: Principles & Policy](https://www.bartleby.com/isbn_cover_images/9781337794992/9781337794992_smallCoverImage.jpg)
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning