Your firm produces fan merchandise for a football team. You want to assess if the four...
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Your firm produces fan merchandise for a football team. You want to assess if the four items manufactured-jerseys', 'caps', 'scarves' and 'shorts' are being produced optimally. In order to do this you increase each of the inputs (capital and labor) by one unit at a time and record the change in output from the current level for jerseys' and 'caps' while you decrease the inputs by one unit at a time and record the change in output from the current level for 'scarves' and 'shorts'. Currently, w $25 and r = $40. The following tables record the different input and output levels. Use the values in the tables to arrive at your conclusions about the four production processes. Table 1: Output and Input levels: Production of Jerseys Output Level (q;) | Labor Units (L₁) Capital Units (K₁) 3241 45 102 3250 46 102 3258 45 103 Table 2: Output and Input levels: Production of Caps Output Level (qe) Labor Units (Le) Capital Units (Kc) 2354 2362 2360 Table 3: Output and Input levels: Production of Scarves Output Level (asc) Labor Units (Lsc) Capital Units (Ksc) 1059 27 65 1054 26 65 1051 27 64 38 39 38 Table 4: Output and Input levels: Production of Shorts Output Level (9sh) Labor Units (Lsh) Capital Units (Ksh) 31 29 29 28 538 521 514 Use the relation a) Jerseys b) Caps c) Scarves d) Shorts. 77 77 78 30 31 r MPK (K, L) MPL(K, L) W to determine if production is optimal. If you conclude that production is not optimal then argue how the input levels should be adjusted for each of the four items: Your firm produces fan merchandise for a football team. You want to assess if the four items manufactured-jerseys', 'caps', 'scarves' and 'shorts' are being produced optimally. In order to do this you increase each of the inputs (capital and labor) by one unit at a time and record the change in output from the current level for jerseys' and 'caps' while you decrease the inputs by one unit at a time and record the change in output from the current level for 'scarves' and 'shorts'. Currently, w $25 and r = $40. The following tables record the different input and output levels. Use the values in the tables to arrive at your conclusions about the four production processes. Table 1: Output and Input levels: Production of Jerseys Output Level (q;) | Labor Units (L₁) Capital Units (K₁) 3241 45 102 3250 46 102 3258 45 103 Table 2: Output and Input levels: Production of Caps Output Level (qe) Labor Units (Le) Capital Units (Kc) 2354 2362 2360 Table 3: Output and Input levels: Production of Scarves Output Level (asc) Labor Units (Lsc) Capital Units (Ksc) 1059 27 65 1054 26 65 1051 27 64 38 39 38 Table 4: Output and Input levels: Production of Shorts Output Level (9sh) Labor Units (Lsh) Capital Units (Ksh) 31 29 29 28 538 521 514 Use the relation a) Jerseys b) Caps c) Scarves d) Shorts. 77 77 78 30 31 r MPK (K, L) MPL(K, L) W to determine if production is optimal. If you conclude that production is not optimal then argue how the input levels should be adjusted for each of the four items:
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a Jerseys The marginal products of capital and labor for the production of jerseys can be calculated from the given data as MPK K L 325832414546 17 MP... View the full answer
Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
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