1. Explain the rule for determining the optimal resource use for a single resource or input and determine the optimal amount of labor, given that each output sells at $2 and labor is $26 per unit.

Labor	Output	MP	MRP	MRC
0	0	***	***	***
1	22
2	38
3	52
4	62
5	70

2. Explain the rule for determining the optimal use of a multiple resources when minimizing costs, then determine the least cost manner of producing 138 units of output given that the price of labor is $4 and the price of capital is $8

Labor	MPL	MPL /PL	Capital	MPK	MPK /PK
1	24		1	40
2	16		2	30
3	12		3	28
4	8		4	10
5	4		5	5

3.If the price of output sells for $0.80 each, determine the profit maximizing quantities of labor and capital that should be used, assuming the price of labor is $4 and the price of capital is $8. If labor and capital are the only inputs, compute the profit of this firm.

Labor	MPL	MRPL	MRPL/PL	Capital	MPK	MRPK	MRPK/PK
1	24			1	40
2	16			2	30
3	12			3	28
4	8			4	10
5	4			5	5

Answer rating: 100% (QA)

SOLUTION 1 Optimal Resource Use for a Single Resource Labor To determine the optimal amount of labor to use we need to find the point where the margin... View the full answer