A construction company has two types of employees: skilled and unskilled. A skilled employee can build 1 yard of a brick wall in one hour. An unskilled employee needs twice as much time to build the same wall. The hourly wage of a skilled employee is $15. The hourly wage of an unskilled employee is $8.
a) Write down a production function with labor. The inputs are the number of hours of skilled workers, LS, the number of hours worked by unskilled employees, LU, and the output is the number of yards of brick wall, Q.
b) The firm needs to build 100 yards of a wall. Sketch the isoquant that shows all combinations of skilled and unskilled labor that result in building 100 yards of the wall.
c) What is the cost-minimizing way to build 100 yards of a wall? Illustrate your answer on the graph in part (b).