Question 3: The boiler in the heating plant at arctic College is designed to burn either fuel oil or coal. Suppose that one ton of coal, C, produces as many BTUs as 100 gallons of fuel oil, F. (a) Draw a typical isoquant for BTU production. (b) What is the elasticity of substitution between fuel oil and coal? (c) Suppose that fuel oil is $1.00 per gallon and coal is $80 per ton. Draw the output expansion path on the diagram and describe the marginal and average cost curves. (d) Repeat (c). assuming that the price of coal has increased to $120 per ton.
Question 3: The boiler in the heating plant at arctic College is designed to burn either...
Please answer Questions e-f-g-h: (a) The boiler of a power plant operates at a maximum temperature of 750oC. The condenser of the power plant draws in cooling water at 20oC. What is the theoretical maximum efficiency of the plant? (b) Now suppose that a real power plant is built to have an efficiency that is 80% of the theoretical efficiency. The power plant needs to generate 1GW (giga-watt) of power. How much energy (per second) needs to be supplied by...