Byzantium Bakery is located on State Street in Yore Town, Pennsylvania. It is a small operation...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Byzantium Bakery is located on State Street in Yore Town, Pennsylvania. It is a small operation known for its opulently crusty loaves. The owner, Leo Constantius, makes a practice of hiring interns from two well-known cooking schools. They remain at Byzantium Bakery for a three-month internship and then go on to full-time positions in five-star restaurants. Yeast of Eden Cooking College (YECC) and Xavier Unleavened Polytechnic (XUP) both produce highly competent graduates, and Leo has found that productivity is higher if he hires interns from both schools rather than just one. Over the past few years, he has compiled the production possibilities table that is shown below, in which Y represents the number of YECC bakers and X represents the number of XUP bakers. Y 7 6 5 4 3 2 1 0 X=> 9 11 12 12 11 9 5 0 0 21 22 22 21 19 16 12 7 1 Loaves of Bread per Hour (Q) 40 48 55 39 52 48 43 37 30 22 31 31 30 28 25 21 16 10 2 37 34 30 25 19 12 3 46 43 39 34 28 21 13 4 13 5 60 56 51 45 39 30 21 11 6 64 59 53 48 40 29 19 8 7 Leo is not sure how to use the information in the table, so he calls up a crusty old economist that he knows at Yore Town University and asks for advice. The economist sends out a student who recently did a wonderful job as an apprentice with Arcane Assemblies. Welcome to your new assignment. Use this information to solve Problems 8 through 12. Use the information in the table to construct an isoquant map. Plot isoquants for Q = 12, Q=21, Q=30, Q = 39, and Q = 48 on the graph below. 5 Number of YECC Bakers (Y) €6 A 3 N 1 0 Chapter 6: Problem 8 2 3 4 Number of XUP Bakers (X) 5 6 7 In the past, Leo has paid bakers from both colleges the same wage. Recently, however, the administration at XUP has insisted on a higher wage. The next group of YECC interns will charge $4 per hour while the XUP interns will charge $5 per hour. Leo wonders if he should stop hiring XUP interns entirely or, if he keeps on hiring both XUP and YECC interns, how many of each he should hire. 9. 10. Plot five isocost lines on the graph with the isoquant map from Problem 8. Each of the isocost lines should pass through the one point on each isoquant that represents the optimal combination of bakers. Next, determine the optimal number of bakers from each school, Leo's total cost of bakers, and the vertical and horizontal intercepts of the isocost lines and enter these values in the table below. Optimal Y Optimal X Total Cost Q=12 Q=21 Q=30 Q=39 = 48 Y Intercept X Intercept Plot the expansion path and the ridge lines on the graph in Problem 8. If the only inputs used by Byzantium Bakery are the two types of bakers, what are returns to scale like for the firm along the expansion path? Calculate the marginal rate of technical substitution (MRTS) in two ways for each of the five isoquants plotted on the graph in Problem 8. Begin at the optimal combination of X and Y on each isoquant. First, calculate the MRTS for a one unit decrease in X. Second, calculate it for a one unit decrease in Y. Enter your results in the table below. MRTS Decrease Y Decrease X Q=12 Q=21 Q=30 Q=39 Q=48 Is there a situation in which Leo should hire only YECC graduates? Is there a situation in which Leo should only hire XUP graduates? If Leo wants to produce 30 loaves per hour and the hourly cost of both types of graduates is the same, how many of each should Leo hire? Byzantium Bakery is located on State Street in Yore Town, Pennsylvania. It is a small operation known for its opulently crusty loaves. The owner, Leo Constantius, makes a practice of hiring interns from two well-known cooking schools. They remain at Byzantium Bakery for a three-month internship and then go on to full-time positions in five-star restaurants. Yeast of Eden Cooking College (YECC) and Xavier Unleavened Polytechnic (XUP) both produce highly competent graduates, and Leo has found that productivity is higher if he hires interns from both schools rather than just one. Over the past few years, he has compiled the production possibilities table that is shown below, in which Y represents the number of YECC bakers and X represents the number of XUP bakers. Y 7 6 5 4 3 2 1 0 X=> 9 11 12 12 11 9 5 0 0 21 22 22 21 19 16 12 7 1 Loaves of Bread per Hour (Q) 40 48 55 39 52 48 43 37 30 22 31 31 30 28 25 21 16 10 2 37 34 30 25 19 12 3 46 43 39 34 28 21 13 4 13 5 60 56 51 45 39 30 21 11 6 64 59 53 48 40 29 19 8 7 Leo is not sure how to use the information in the table, so he calls up a crusty old economist that he knows at Yore Town University and asks for advice. The economist sends out a student who recently did a wonderful job as an apprentice with Arcane Assemblies. Welcome to your new assignment. Use this information to solve Problems 8 through 12. Use the information in the table to construct an isoquant map. Plot isoquants for Q = 12, Q=21, Q=30, Q = 39, and Q = 48 on the graph below. 5 Number of YECC Bakers (Y) €6 A 3 N 1 0 Chapter 6: Problem 8 2 3 4 Number of XUP Bakers (X) 5 6 7 In the past, Leo has paid bakers from both colleges the same wage. Recently, however, the administration at XUP has insisted on a higher wage. The next group of YECC interns will charge $4 per hour while the XUP interns will charge $5 per hour. Leo wonders if he should stop hiring XUP interns entirely or, if he keeps on hiring both XUP and YECC interns, how many of each he should hire. 9. 10. Plot five isocost lines on the graph with the isoquant map from Problem 8. Each of the isocost lines should pass through the one point on each isoquant that represents the optimal combination of bakers. Next, determine the optimal number of bakers from each school, Leo's total cost of bakers, and the vertical and horizontal intercepts of the isocost lines and enter these values in the table below. Optimal Y Optimal X Total Cost Q=12 Q=21 Q=30 Q=39 = 48 Y Intercept X Intercept Plot the expansion path and the ridge lines on the graph in Problem 8. If the only inputs used by Byzantium Bakery are the two types of bakers, what are returns to scale like for the firm along the expansion path? Calculate the marginal rate of technical substitution (MRTS) in two ways for each of the five isoquants plotted on the graph in Problem 8. Begin at the optimal combination of X and Y on each isoquant. First, calculate the MRTS for a one unit decrease in X. Second, calculate it for a one unit decrease in Y. Enter your results in the table below. MRTS Decrease Y Decrease X Q=12 Q=21 Q=30 Q=39 Q=48 Is there a situation in which Leo should hire only YECC graduates? Is there a situation in which Leo should only hire XUP graduates? If Leo wants to produce 30 loaves per hour and the hourly cost of both types of graduates is the same, how many of each should Leo hire?
Expert Answer:
Answer rating: 100% (QA)
To solve Problems 8 through 12 using the production possibilities table provided by Byzantium Bakery we can follow these steps 1 Understand the Production Possibilities Table The table shows the numbe... View the full answer
Related Book For
Elementary Statistics
ISBN: 978-0538733502
11th edition
Authors: Robert R. Johnson, Patricia J. Kuby
Posted Date:
Students also viewed these business communication questions
-
The increase in Internet usage over the past few years has been phenomenal, as demonstrated by the February 2004 report from the Pew Internet & American Life Project. The survey of Americans 65 or...
-
Over the past few years the percentage of students who leave Lakeland College at the end of the first year has increased. Last year Lakeland started a voluntary one-week orientation program to help...
-
Over the past few years, the number of start-up companies attracted to either doing business themselves in the cloud, or specifically creating applications for others to use in the cloud, has grown...
-
In Section 36.6 we saw that muons can reach the ground because of time dilation. But how do things appear in the muons reference frame, where the muons half-life is only 1.5 s? How can a muon travel...
-
Wondra Supplies showed the following selected adjusted balances at its December 31, 2013, year-end: During the year 2014, the following selected transactions occurred: a. Sales totalled $ 1,800,000,...
-
From output of your computer software, locate (a) the sum of squared errors, (b) the \(F\)-value for the overall significance of a regression model, (c) the estimated covariance matrix for the least...
-
A single cylinder, four stroke cycle oil engine is fitted with a rope brake. The diameter of the brake wheel is \(600 \mathrm{~mm}\) and rope diameter is \(26 \mathrm{~mm}\). The dead load on the...
-
Louie Anderson works in the production department of Southwest Plasticworks as a machine operator. Louie, a long-time employee of Southwest, is paid on an hourly basis at a rate of $ 20 per hour....
-
The following transactions were completed by the company: a. The company completed consulting work for a client and immediately collected $7,300 cash. b. The company completed commission work for a...
-
Sally's Alterations rents a building in the city of Toledo to provide top-notch services to customers. Sally pays rental insurance to protect against loss or damage to her inventory. She pays a...
-
Select either Topic A or Topic B and write an informative speech. Topic A: How Technology Has Impacted Society. Topic B: History of Your Hometown.
-
Dunphy Company issued $32,000 of 7.0%, 10-year bonds at par value on January 1. Interest is paid semiannually each June 30 and December 31. QS 14-3 (Algo) Financial statement Impact of bond...
-
Part A A parallel-plate capacitor is formed from two 4.0 cm x4.0 cm electrodes spaced 2.9 mm apart. The electric field strength inside the capacitor is 1.0 106 N/C. What is the charge (in nC) on the...
-
Solve 6. 8. 8 So log x (1 + x)(4+ x) [log x] 2 dx 0 1 + x So dx
-
Prepare one-page description of the company and a one-page description of the project. In the project description, please list all the key stakeholders who will attend the project kickoff meeting....
-
In the following figure, the first resistance (R = 2502) and the second resistance (R = 1252), calculate: 1- The value of the resistance (R4) when the bridge is in equilibrium (V =V) and the value of...
-
What are two considered main business challenges of Amazon in the Middle East market currently? How could it address the same better in the next five years? Discuss. 2.Is Middle East the best market...
-
we have to compute the letter grades for a course. The data is a collection of student records stored in a file. Each record consists of a name(up to 20 characters), ID (8 characters), the scores of...
-
Verify that Applied Example 11. 3, Birth Days (p. 554), is a multinomial experiment. Be specific. a. What is one trial? b. What is the variable? c. What are the possible levels of results from each...
-
All new drugs must go through a drug study before being approved by the U.S. Food and Drug Administration (FDA). A drug study typically includes clinical trials whereby participants are randomized to...
-
The extraction force required to remove a cork from a bottle of wine has a normal distribution with a mean of 310 Newtons and a standard deviation of 36 Newtons. a. The specs for this variable, given...
-
When a contracting hot ball of gas spins into a disk shape, it cools faster due to (a) increased radiation transfer. (b) increased surface area. (c) decreased insulation. (d) increased convection...
-
The Sun contains what percentage of the solar systems mass? (a) about 35% (b) 85% (c) the percentage varies over time (d) over 99%
-
The nebular theory is based on the observation that the solar system (a) follows patterns indicating that it formed progressively from physical processes. (b) has a structure much like an atom. (c)...
Study smarter with the SolutionInn App