Explain the rule for determining the optimal resource use for a single resource or input and determine
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Question:
- 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 |
Related Book For
Microeconomics A Contemporary Introduction
ISBN: 978-1111415921
9th edition
Authors: William A. McEachern
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