In the graph below, the price of capital is $500 per unit. How many units of labor should a firm use in order to produce 30,000 units of output at the lowest possible cost?
300 units of labor
320 units of labor
500 units of labor
800 units of labor
none of the above
Homework Answers
If price of capital=500 and capital amount=160 if all amount is spent on capital
Total expenditure=500*16=80000 and labor cost=80000/8000=100
At pint B, capital=100 and capital expenditure=50000. Thus labor=(80000-50000)/100=300
ans is A. Labor=300
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In the graph below, the price of capital is $500 per unit. How
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Answer: a (EXPLAIN)
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#3
3. The isoquant map for a firm that produces output with labor and capital is shown on the next page. The price of labor is $20 per unit and the price of capital is $60 per unit. a) Draw the isocost lines for expenditures of TC =$300 and TC -$360. b) How many units of labor and how many units of capital should the firm hire to minimize the cost of producing Q. units of output? EXPLAIN. c) What...
pts 220 6 160 Q 50,000 Q 30.000 50 Q 10,000 350 500 800 1.100 Units of labor The price of capital is $500 per unit. 350 500 800 Units of labor 1,100 The price of capital is $500 per unit. Between 30,000 and 50,000 units of output, how much does each additional unit of output add to long-run total cost? $1.50 O$300 $30,000 O$2.45 none of the above
pts 220 6 160 Q 50,000 Q 30.000 50 Q 10,000...
In the following graph, the price of capital is $100 per unit;
the price of labor is $25 per unit. When output is 20 units, what
is AVERAGE cost?
a. $350
b. $700
c. $3,500
d. $7,000
e. none of the above
Answer: a (EXPLAIN)
100 70 S 64 40 Q 30 24A Q 20 Q-10 144 120 160 280 64 400 Units of labor
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#3
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