The invention of a new machine serves as a mobile station for receiving and accumulating packed flats of strawberries close to where they are picked, reducing workers' time and burden of carrying full flats of strawberries. According to Rosenberg (2004), a machine-assisted crew of 12 pickers produces as much output, q*, as that of an unaided crew of 20 workers. In a 6-day, 50-hour workweek, the machine replaces 400 worker-hours. At an hourly wage cost of $10, a machine saves $4,000 per week in labor costs, or $104,000 over a 26-week harvesting season. The cost of r of machine operation and maintenance expressed as a daily rental is $300, or $1,800 for a six-day week. Thus, the net savings equal $2,200 per week, or $57,200 for 26 weeks. Draw the q* isoquant assuming that only two production methods are available (pure labor and labor-machine). Label the soquant and axes as thoroughly as possible. Add an isocost line to show which technology the firm chooses (be sure to measure wage and rental costs on a comparable time basis). The machine can be rented for $50 per hour (from $300 divided by 6 hours). 1.) Using the line drawing tool, graph the firm's isoquant for producing q* units of output. Label this line '1.' 2.) Using the line drawing tool, graph the firm's isocost line for producing units of output at lowest cost. Label this line L.' Hours of labor without the machine 26 24 22 20 18 16 14 12 10 8- 2- 8 10 12 14 16 18 20 Hours of labor with the machine : 24 26
The invention of a new machine serves as a mobile station for receiving and accumulating packed flats of strawberries close to where they are picked, reducing workers' time and burden of carrying full flats of strawberries. According to Rosenberg (2004), a machine-assisted crew of 12 pickers produces as much output, q*, as that of an unaided crew of 20 workers. In a 6-day, 50-hour workweek, the machine replaces 400 worker-hours. At an hourly wage cost of $10, a machine saves $4,000 per week in labor costs, or $104,000 over a 26-week harvesting season. The cost of r of machine operation and maintenance expressed as a daily rental is $300, or $1,800 for a six-day week. Thus, the net savings equal $2,200 per week, or $57,200 for 26 weeks. Draw the q* isoquant assuming that only two production methods are available (pure labor and labor-machine). Label the soquant and axes as thoroughly as possible. Add an isocost line to show which technology the firm chooses (be sure to measure wage and rental costs on a comparable time basis). The machine can be rented for $50 per hour (from $300 divided by 6 hours). 1.) Using the line drawing tool, graph the firm's isoquant for producing q* units of output. Label this line '1.' 2.) Using the line drawing tool, graph the firm's isocost line for producing units of output at lowest cost. Label this line L.' Hours of labor without the machine 26 24 22 20 18 16 14 12 10 8- 2- 8 10 12 14 16 18 20 Hours of labor with the machine : 24 26
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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