Suppose that when neither input exceeds four times the other, capital and labor are perfect substitutes at a one-to-one ratio. However, once the input ratio reaches four to one in favor of either input, no further substitution is possible. Draw the isoquants.

Suppose that when neither input exceeds four times the other, capital and labor are perfect substitutes at a one-to-one ratio. However, once the input ratio reaches four to one in favor of either input, no further substitution is possible. Draw the isoquants.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Exercise 3 Consider a firm with production function of the q (L, K) = L√K, where q is the quantity…

A: An isoquant is a concept used in economics to represent a graphical or mathematical relationship…

Q: Suppose the production budget is $200/hour, the wage is $5/hour, and the cost of capital is…

A: Isocost is a downward sloping curve which shows different combinations of labor and capital that can…

Q: Lesson 8 - Costs Question 12

A: The Marginal Rate of Technical Substitution (MRTSLK) is 0.50.Explanation:Production function is as…

Q: A widget manufacturer has an infinitely substitutable production function of the form q= 2K+L a.…

A: The isoquant maps for the given production function show combinations of capital (K) and labor (L)…

Q: 4. The marginal rate of technical substitution is initially equal to the input price ratio, but the…

A: Marginal rate of technical substitution (MRTS) shows the substitution of two factors : labor and…

Q: If the production function is F(K,L) = AKºL¹-ª , then the Marginal Rate of Technical substitution…

A: To determine the Marginal Rate of Technical Substitution (MRTS), we have to determine the partial…

Q: Suppose that Ann's budget for running her shop is $100. She pays her worker a wage of $20 and…

A: Answer to the question is as follows:

Q: The total cost function of a firm is given by: C = q(W)¹³(V) Where q is total output, W and V are…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: If the production function is F(K,L) = A * K0.4L0.6 then the Marginal Rate of Technical Substitution…

A: Marginal Rate of Technical Substitution(MRTS) measures the rate at which one input is substituted…

Q: Suppose that a firm has production function f(K, L) = K². L². An isoquant curve for this production…

A: An isoquant, short for "isocost quantity," is a concept in microeconomics that represents the…

Q: 56, K=103, the marginal product of labor is 2 and the marginal product of capital is 2. What is…

A: Marginal rate of technical substitution alludes to the rate at which the inputs are substituted in…

Q: The combinations of inputs that produce a given level of output are depicted by isoquants. In…

A: MRTS = MPL /MPK MPL= dQ/dL ie the first order partial differentiation with respect to L =…

Q: Consider the following production functions F(L,K)=LK^3 F(L,K)=L+3K (a) Discuss if each marginal…

A: (a) MPL = ∂Q/∂L = K3 So, MPL is independent of L and is constant. MPK = ∂Q/∂K = 3LK2 So, as K…

Q: = 3. The prices of 1. Bulldog, Inc. measures the technical rate of substitution at MPL/MPk labor and…

A: The rational motive of every producer is the minimize the cost of production such that the maximum…

Q: Consider the following production function: Q = 2K + 8L. Capital (K) is on the vertical axis and…

A: MRTS is the slope of isoquant. An isoquant shows all combination of L and K which yield the same…

Q: Part 1 A firm's production function is given by the equation /(L. K) = 10.00L + 20.00K, where L and…

A: A production function gives the technical relationship between the quantities of inputs and the…

Q: Suppose a firm is planning to replace a labor intensive production process with an automated robot…

A: Given Labor-intensive production: L1= 24 workers and K1=3 machines Automated robot production: L2=…

Q: If the production function is F(K, L) = AKL¹-a then the Marginal Rate of Technical substitution does…

A: Production function: The marginal rate of technical substitution between input L and K is the rate…

Q: Consider the case of a firm which produces q units of a single output using two inputs, labour (L)…

A: An isoquant refers to that combinations of inputs which provide same level of output . Slope of an…

Q: Find the marginal rate of technical substitution for inputs k and 1 of this production function q =…

A: Production function: q = k + l Where q is quantity k is capital l is labor ----------------------…

Q: For each of the following production functions, please do the following: i) graph the isoquant curve…

A: Production function refers to that function which depicts the maximum possible output that can be…

Q: Joe owns a small coffee shop. His production function is q = 2K0.5 L where q is the number of cups…

A: Answer - Given in the question- Joe owns a small coffee shop. His production function is q = 2K0.5 L…

Q: Lesson 7- Production Question 1

A: MRTSLK=3 Explanation:Given, q=4L0.75K0.25 Step:1 MPL=∂L∂qMPL=4(0.75)(LK)0.25…

Q: A widget manufacturer has an infinitely substitutable production function of the form q= 2K+L a.…

A: a. The isoquant maps for q=20, q=40, and q=60 can be graphed as follows:Isoquant for q=20:q= 20 =…

Q: If the production function is F(K,L)=A∗K0.4L0.6 then what is the marginal rate of technical…

A: The production function refers to the mathematical relationship between the output of a firm or a…

Q: Consider the following production function: Q= 2K + 8L. Capital (K) is on the vertical axis and…

A: MRTS refers to the rate at which capital can be substituted with labor by the firm.

Q: Assume the production function is given by: f(x1, x2) = (2x9.253.r5)³. What is the absolute value of…

A: A production function is a mathematical relationship between the physical output of a production…

Q: Answer the following questions clearly in computer-typed print with Make sure you label your graphs…

A: The isoquant reflects the different consumption combination of two inputs (L and K) that a firm can…

Q: If the marginal product of labor is 25 and the marginal product of capital 10, what is the marginal…

A: Marginal rate of technical substitution is the slope of isoquant. The marginal rate of technical…

Q: The production function has the following form q= K + 2L where q is output, K is capital input and L…

A: Answer: Given, Production function: q=K+2Lw=5v=2q=6 units The following condition must satisfy to…

Q: Which of the following statements is (are) TRUE? I. If labor and capital are perfect substitutes in…

A: Isoquant: A graphical representation showing all the possible combinations of inputs (e.g., labor…

Q: In the long - run with strictly convex isoquants . If the relative price of labor(w/r) exceeds the…

A: As MRTS < relative price ratio so isoquant is flatter than the is cost line. To minimize the cost…

Q: Lesson 8 - Costs Question 3

A: The desired value of MRTSLK is -3. Explanation:The marginal rate of technical substitution (MRTS)…

Q: Suppose that a firm's estimated production Q = K3/4L1/4 What is the marginal rate of technical…

A: Marginal rate of technical substitution refers to the ratio of marginal product of labour and…

Q: The Constant Elasticity of Substitution (CES) production function is a flexible way to describe how…

A: (A)Given, that the question states that the firm's objective is to maximise the present discounted…

Q: For each of the following examples, draw a representative isoquant. What can you say about the…

A: Marginal rate of technical Substitution is the slope of isoquant curve. And it is denoted by MRTS =…

Question

Suppose that when neither input exceeds four times the other, capital and labor are
perfect substitutes at a one-to-one ratio. However, once the input ratio reaches four
to one in favor of either input, no further substitution is possible. Draw the
isoquants.

Expert Solution

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!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

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

Alex uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{L/4, K^0.8}.If he uses 1 kg of wool and 3 hours of labour, he can produce 1 t-shirt.1. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axis and wool on vertical. 2. Given that the price of labour is w=$10 and the price of each kg of wool is p=$6What is the optimal amount of labour and fruit to use to produce q T-shirts, if she wants to minimise costs? Draw on the diagram from 1.) by with corresponding isocost lines
When the production function is linear, q = 0.20L + 0.10K, the factors are perfect substitutes for one another and the isoquant is linear. Determine the equation for the isoquant when output equals 200 units. K= Assuming capital is plotted on the vertical axis and labor is plotted on the horizointal axis, what is the marginal rate of technical substitution (MRTS) in this case? MRTS = - (Enter a numeric response using a real number rounded to two decimal places.) tv MacBook Air DII F4 F6 F7 FB F10 F3 %23 & 3 4 5 7 8 { [ E R Y P D F G H J K > C N M command option .. .. - B >
Suppose a production function is given by the equation Q = LVK. 1. Graph the isoquants corresponding to Q = 10, and Q = 20. 2. MP = √K and MP = 0.5(L/VK). Find the Marginal Rate of Technical Substitution LK (MRTSLK). Do these isoquants exhibit diminishing marginal rates of technical substitution? (Does the slope get flatter as L increases?) 3. The cost of labor is w = $5 per labor hour and the cost of capital is r = $15 per machine hour. What is the equation of the $1500 iso-cost curve?
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…
In the long run with strictly convex isoquants. If the relative price of labor (w/r) exceeds the marginal rate of technical substitution (MP.L/MP.k). What changes should happen to the input mix? Explain your answer.
Grease Tech produces oil changes. The production of oil changes reles on both capital (K) and labor (L) and is combined in the following production function F (K, L) = KILL Take the derivative of this production function with respect to capital. What is the marginal product of capital evaluated at (le. just plug in the numbers) 64 units of capital used and 16 units of labor?
Assume there is a linear isoquant where the input combination K = 10, L = 0 produces Q = 100. Assume that this isoquant has a MRTS (marginal rate of technical substitution) such that an increase in L by 1 unit requires the firm to give up – ½ unit of K. Assume PL = $1 and PK = $1. What is the smallest total cost necessary to produce Q = 100? $20 $10 $50 $100
Assume there is a linear isoquant where the input combination K = 10, L = 0 produces Q = 100. Assume that this isoquant has a MRTS (marginal rate of technical substitution) such that an increase in L by 1 unit requires the firm to give up – ½ unit of K. Assume PL = $1 and PK = $1. What is the smallest total cost necessary to produce Q = 100?
Please type your answer step by step
Assume there is a linear isoquant where the input combination K = 10, L = 0 produces Q = 100. Assume that this isoquant has a MRTS (marginal rate of technical substitution) such that an increase in L by 1 unit requires the firm to give up – ½ unit of K. Assume PL= $1 and PK = $1.What is the smallest total cost necessary to produce Q = 100?
in the long-run with strictly convex isoquants. If the relative price of labor (w/r)exceeds the marginal rate of technical substitution ( Mpl/Mpk)What changes should happen to the input mix? Explain your answer.