d. A major advance in technology occurs that allows farmers to produce a25-pound gain per lamb with less hay and grain than the preceding tableindicates. If the marginal rate of technical substitution (at each rate ofconsumption of each input) is the same after the technological advanceas before, can you draw the new isoquant corresponding to a 25-poundgain per lamb? 2. A consulting firm specializing in agriculture determines that the followingcombinations of hay and grain consumption per lamb will result in a 25-pound gain for a lamb:Pounds of hayPounds of grain40130.950125.160120.170115.780111.890108.3110102.313097.415093.8

All of the input combinations that tend to yield the same output level are known as an isoquant…

Answered: d. A major advance in technology occurs…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Suppose that the production function is f(x1,x2) = (xf + x£)», where a and b are positive constants. For what values of a and b is there a diminishing technical rate of substitution (TRS)?
For each of the following cases, determine whether the firm should (A) Use more labor and less capital, or (B) Use more capital and less labor. 1. The marginal rate of technical substitution is 2 (i.e., the marginal product of labor is twice the marginal product of capital) and the input price ratio is 3 (i.e., a unit of labor costs three times as much as a unit of capital) 2. The marginal rate of technical substitution is 2 (i.e., the marginal product of labor is twice the marginal product of capital) and the input price ratio is 1 (i.e., a unit of labor costs the same as a unit of capital) 3. The marginal rate of technical substitution is initially equal to the input price ratio, but the firm's machines depreciate, so that the marginal product of capital decreases. 4. The marginal rate of technical substitution is initially equal to the input price ratio, but the firm successfully negotiates a lower rate of rent for their machines, so that the price of capital decreases. 5. The…
M5
A firm is currently producing 500 units of output daily by employing 60 units of labor daily at a price of $10 per unit and 30 units of capital daily at a price of $20 per unit. The marginal product of the last unit of labor employed is 3, and the last unit of capital employed is 5. a. Given the above information, what does the firm's marginal rate of technical substitution, MRTSL,K, equal? b. Indicate on the following diagram some point labeled A that is consistent with the information given in the question.
1. Suppose that a producer has the following production function: Q = KL'5 Where Q is output, and L and K are man-hours and machine-hour the two inputs used in the production process. 1A) Set up the cost minimization problem as shown in class
Constrained Optimization: Cobb-Douglas Production Function:1. Based from the factor shares of the two inputs, what will happen to the number of output if it the firm decides to triple both the amount of labor and capital?2. State the optimization problem of the firm.3. Solve for the formulas of the Marginal Product of Labor (MPL), and Marginal product ofCapital (MPK)4. Using your knowledge of the tangency condition in Producer’s theory, find the combinationof K and L that the firm should use to produce the maximum possible output. Do not solvethe problem using the Lagrangian method.Note: The tangency conditions just states that the slope of the production function must beequal to the slope of the isocost function.5. What is the maximum possible output that the firm could earn given the constraint it faces?
Distinguish between the Marginal Rate of Technical Substitution and Elasticity of Substitution in production
6
Argue using a graph that the elasticity of substitution for a linear production function, f(1, k) = al + bk, is infinite. Hint: dividing by something really small makes the quotient really big.
Production. Assume a production with two variable inputs (L, K). Show graphically the following and explain: (a) fixed-proportions production function (b) inputs are perfect substitutes
Consider two farms, A and B. The input use and output are given in the following table. The wage = $80 per day and rental price of the machines = $100 per day Farm Labour(L) Physical capital(K) Output(Q) Q/L Q/K TFP A 2 2 200 ? ? ? B 4 1 200 ? ? ? Which farm is more productive according to the productivity measures? Which of the three measures is the most informative measure of agricultural productivity? Why?
Please help me find the marginal rate of substitution.

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