Initially a firm's wage is w $24 and its rental cost of capital is r $24. After its wage rate doubles, how do its isocost lines change? Let L represent labor and K capital. 1.) Using the line drawing tool, graph an isocost line at the original wage, when the wage is w= $24. Label this line 2.) Using the line drawing tool, graph an isocost line at the new wage, when the wage doubles. Label this line 12 Carefully follow the instructions above, and only draw the required objects. K, Capital 18- 16- 14- 10- 10 12 14 16 18 Labor

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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am. 118.

Initially a firm's wage is w = $24 and its rental cost of capital
is r $24. After its wage rate doubles, how do its isocost
lines change?
Let L represent labor and K capital.
1.) Using the line drawing tool, graph an isocost line at the
original wage, when the wage is w= $24. Label this line
11:
2.) Using the line drawing tool, graph an isocost line at the
new wage, when the wage doubles. Label this line "12.
Carefully follow the instructions above, and only draw the
required objects.
K, Capital
20-
18-
16
10-
8-
F
6 8 10 12
L, Labor
14 16 18
Transcribed Image Text:Initially a firm's wage is w = $24 and its rental cost of capital is r $24. After its wage rate doubles, how do its isocost lines change? Let L represent labor and K capital. 1.) Using the line drawing tool, graph an isocost line at the original wage, when the wage is w= $24. Label this line 11: 2.) Using the line drawing tool, graph an isocost line at the new wage, when the wage doubles. Label this line "12. Carefully follow the instructions above, and only draw the required objects. K, Capital 20- 18- 16 10- 8- F 6 8 10 12 L, Labor 14 16 18
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