Mad Max's Road Warriors fix potholes in interstate highways. Max's road crews fill potholes using workers and shovels in 1 to 1 correspondence. A worker with 1 shovel can fill 10 potholes in a day. A worker with 2 shovels can still only fill 10 potholes, as can 2 workers with 1 shovel.
a. Draw the production isoquant corresponding to filling 30 potholes.
b. Assume that production displays constant returns to scale, and draw a few more isoquants.
c. If shovels rent for $5, and workers must be paid $25, draw several isocost lines.
d. If Mad Max has received a state contract to fill 30 potholes, what is the minimum cost at which it can fulfill the contract?
e. If the cost of renting a shovel suddenly rises from $5 to $6, what will happen to the composition of inputs that Mad Max uses to fill potholes? Why?