BusinessWeek , in an article dealing with management, wrote, “When he took over the furniture factory three years ago . . . [the manager] realized almost immediately that it was throwing away at least $100,000 a year worth of wood scrap. Within a few weeks, he set up a task force of managers and workers to deal with the problem. And within a few months, they reduced the amount of scrap to $7,000 worth [per year].” Was this necessarily an economically efficient move?
Answer to relevant QuestionsConsider the production function Q = 20 K1/2 L 1/2. The firm operates in the short run with 16 units of capital. a. The firm’s short-run production function is Q = __________________. b. The average product of labor ...The MorTex Company assembles garments entirely by hand even though a textile machine exists that can assemble garments faster than a human can. Workers cost $50 per day, and each additional laborer can produce 200 more units ...Ross Perot added his memorable “insight” to the debate over the North American Free Trade Agreement (NAFTA) when he warned that passage of NAFTA would create a “giant sucking sound” as U.S. employers shipped jobs to ...Consider the Cobb-Douglas production function Q = 36 K0.5 L 1.0. a. Find the marginal product functions. b. Write equations for the MRTS and the output elasticities. c. The function coefficient is equal to , so the ...Suppose you own a home remodeling company. You are currently earning short-run profits. The home remodeling industry is an increasing-cost industry. In the long run, what do you expect will happen to? a. Your firm’s costs ...
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