For each of the five labeled points (A, B, C, D, and E), determine whether the correct levels of labor and capital are being used. If the correct level is not being used, explain why, and what change should be made.

For each of the five labeled points (A, B, C, D, and E), determine whether the correct levels of labor and capital are being used. If the correct level is not being used, explain why, and what change should be made.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

See similar textbooks

Related questions

Q: Suppose a consumer's utility function is given by U(X,Y)= X¹/²*Y¹/². Also, the consumer has $36 to…

A: Utility maximization problem : With the given prices and the income, a consumer chooses his…

Q: st and explain the benefits arising from international investing. What challenges may arise in…

A: Hedging can be defined s the strategy of risk management used by investors to minimize or reduce the…

Q: Amount (in dollars) Celto Money Public Cash Holdings $20,000 Checking Accounts Savings Accounts…

A: Money supply refers to the total amount of money available within an economy at a specific point in…

Q: A consumer has utility (₁,₂)=₁+122. Suppose that, because of a shortage of good 1, the government…

Q: Today ABC Corp. starts a project that requires it to invest in new equipment of $990,000. Doing so…

A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…

Q: What are the emerging trends and developments in transfer pricing globally

A: Transfer pricing refers to the practice of setting prices for goods and services sold between…

Q: The book states “The pain caused by the movement toward a free trade regime is a short-term…

A: The benefits individuals or countries receive when they participate in trade with others are known…

Q: You are the primary engineer overseeing your company's best-selling product line. Even though the…

A: The cost of buying parts from 3rd party is $3.75 per part.Annual production or sale =1 million or…

Q: Boxer Production, Inc., is in the process of considering a flexible manufacturing system that will…

A: Introduction:Capital investment decisions are also known as capital budgeting decisions as these are…

Q: Consider the non-linear aggregate consumption function: C = 0.05Y²+ Y + 80 (Where, C = aggregate…

A: Marginal Propensity to Consume denotes the increase in income level which is spent that gets spent…

Q: Two students, Cindy and Xavier, are discussing labour-leisure choice. Cindy says that if Kimberley…

A: A normal good is one that sees an increase in demand due to an increase in consumer income. In other…

Q: a. What is the cost of 1 unit of cloth and a computer in Here? Round your answers below to 2 d 1…

A: (A) Here:60 cloth = 100 computersUsing unitary method, 1 cloth = 100/60 computers1 cloth = 1.67…

Q: The figure given below shows the demand and supply curves of steel. 5, is the private supply curve,…

A: A negative externality refers to a cost or consequence that is imposed on a third party or society…

Q: Consider the following fixed borrowing rates available to Pepper Corp and to Truffles Corp in both…

A: There are two corporations and their borrowing rates are identified and are provided in the table…

Q: Write a report highlighting how simulation methods can be embraced in banking sector

A: IntroductionThe banking sector is a complex and ever-changing industry. Banks are constantly faced…

Q: My perspective is that the interests should be the paramount concern of government trade poly…

A: Economic growth implies an increment in the production and consumption of products and services…

Q: Producers' Surplus A supplier of portable hair dryers will make x hundred units of hair dryers…

A: Producer surplus (PS) is the difference between the minimum price a producer is willing to sell a…

Q: Consider the state space model. Suppose there are three states in the economy next year. Suppose the…

A: A state space model describes system's dynamics across time. It consists of state equations and…

Q: A Canadian firm needs Mexican pesos to buy Mexican goods. If the peso is worth $.07, and the…

A: Exchange rate refers to the rata at which the currency of one nation can be exchanged to the another…

Q: 6. In a classical economy, the velocity of money is 100 (constant). a. If output is 1000 units and…

A: Quantity theory of money is an economic concept that determines the relationship between money…

Q: Sample figure of AD curve has negative slope

A: Aggregate demand:Aggregate Demand is when the total number of consumers have the desire to buy…

Q: 3. Changes in the money supply The following graph represents the money market for some hypothetical…

A: It can be described as the specific portion of any investment and loan which is charged over a…

Q: 5. What has been the path of inflation since the pandemic? Draw, and explain, an AD-AS diagram that…

A: Inflation refers to a widespread upward movement in prices and a decline in the buying power of…

Q: Consider a duopoly, where each firm may choose among three strategies: zero, small, or large levels…

A: Here are 2 firmsFirm A, Firm B

Q: Suppose that Karen deposits $600 into her checking account at the bank. The reserve requirement for…

A: Reserves = Reserve Requirements * DepositsLoan = Deposits - Reserves

Q: POSTER PROJECT Individual Project 1 Solved Problem for each Topic Assigned Use Equations Tool…

A: Present Worth: Present worth, also known as present value or discounted cash flow, refers to the…

Q: Critically evaluate the following statement: “if factories must pay a fixed cost to open, then a…

A: A subsidy is considered money that is granted by the government to help the economy by supporting…

Q: Take the Solow model without technological change. Assume there is a government that taxes…

A: The Solow Growth Model is an exogenous economic growth model that represents increased capital…

Q: Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help…

A: Introduction: A business decision-making is a process applied to each decision carried out by the…

Q: which of the following is an assumption of the monetary approach to the exchange rates? A - PPP…

A: The market for foreign exchange is an internationally, decentralized marketplace that allows both…

Q: Capitalized cost is an application of perpetuity. It is the sum of the first cost and the present…

A: Replacement required at every years.

Q: How does an employer decide to pay an employee a salary or hourly? Provide an example of positions…

A: ***Since the student has posted multiple questions, the expert is required to solve only the first…

Q: ges and disadvantages of exporting computers from the United States to Western Europe. There are…

A: It can be described as the legal procedure of giving permission by the property right holder to any…

Q: Direction: Research the issues of the Agrarian reform program of President Manuel L. Quezon up to…

A: ***According to guidelines, external citations or links cannot be used in the answer.***The Asian…

Q: For each quantity of tutoring sessions he could give, fill in the Total Revenue column in the…

A: An individual’s willingness to pay for each unit of the quantity he or she wishes to consume is…

Q: During the global financial crisis from 2007 to 2008, government bond interest rate declines from 5%…

A: In a bond market, individuals have the opportunity to either issue new debt (referred to as the…

Q: After developing the new Personal computer with special functions the company would need to be…

A: Production costs are the costs related to producing a good or providing a service. They consist of…

Q: Arthur spends his income on bread and chocolate. Chocolate is a good from which Arthur gets a…

A: Indifference curve: Indifference curve shows different combinations of 2 goods such that consumer’s…

Q: If producing a good generates pollution (a negative externality), from a social perspective ... a.…

A: Negative externality occurs when the production of a good causes indirect negative impact on the…

Q: The table below provides information about a hypothetical economy for 2015, 2016 & 2017. 2016 2017…

A: Gdp Deflator is a tool to measure the GDP affected by the change in prices of goods rather than the…

Q: Price: 2.) Quantity: 3.) Total Revenue: 4.) Total Cost: 5.) Total Variable Cost: 6.) Total Fixed…

A: A perfect competitive market is a market where a large number of buyers and sellers exist and firms…

Q: Assumptions for all the questions: Private consumption is a function of disposable income and…

A: ***Since the student has asked for a specific part of the subparts to be solved, hence, the expert…

Q: The indifference curve below represents various combinations of ice cream and pizza that provide you…

A: Marginal rate of substitution is the rate at which one good can be substituted for the other. The…

Q: When examining GDP on a global scale, two issues become apparent. Is it conceivable to take these…

A: Two fundamental concerns occur when comparing GDPs.The underground economy and expense of living are…

Q: A company is considering three pieces of equipment. Equipment A has a first cost of $80,000, AOC of…

A: Net Present Value (NPV) is a financial metric used to assess the profitability of an investment or…

Q: Consider the following economy:- Mariginal propensity to save = 0.2 Mariginal propensity to…

A: Economic policy formulation will remain critical since it determines how the economy will develop…

Q: Prisoner's dilemma refers to Question 34Select one: a. how cooperation beween players leads to…

A: Prisoner's Dilemma in game theory illustrates a situation where two individuals are faced a decision…

Q: To maximize its profit, the monopolist should produce decimal places.) The company's…

A: The monopoly refers to the market condition where a single firm exists in the market. A firm is…

Q: Suppose that a company that makes and sells hand-crafted artwork has a cost function C(x) = 24x +…

A: Profit is the dissimilarity between the revenue that an economic commodity has obtained from its…

Q: a. You are the coordinator of a nonprofit that distributes donated items to three local homeless…

A: To determine the most effective way of distributing donated items to the three local homeless…

Question

Consider the following production diagram:
12
10 A
Capital
6
2
0
0
1
Labor
4
For each of the five labeled points (A, B, C, D, and E), determine whether the correct levels of
labor and capital are being used. If the correct level is not being used, explain why, and what
change should be made.
Hint: Start by identifying the optimal point. Being able to compare to the optimal point will
assist you in determining the changes that need to be made.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define the given problem:

VIEW

Step 2: Determine whether the correct levels of labor and capital are being used:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 7 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

3. What are the 2 variables that the Production Function is analyzing/graphing? Why does the production function diminish over time?
worn out in the production process. ment Now IzMe: Section 2.7 uge your comprehension of this section. To begin, please click the wnward arrow located at the top right of this box. Assignment Score: 0.00% Submit Assignment for Grading Save ns tu2et10h_Ch02_Sec07.02m « Question 2 of 3 » Check My Work Three different economies have made choices about the production of capital goods. Which of the following is most likely to produce the greatest growth in the production possibilities curve (PPC)? O a. Less production of capital goods than what is needed to replace worn-out capital. Ob. Capital goods produced at the exact rate needed to replace worn-out capital. c. More production of consumption goods that replace worn-out capital. O d. Greater production of capital goods than what is needed to replace worn-out capital. MacBook Air DD F6 EZ F8 F9 F10 F11 F12 & * 6 7 8 { P + 000
please asnwer the question in the image Some economists believe that the U.S. economy as awhole can be modeled with the following productionfunction, called the Cobb–Douglas production function:Y 5 AK1/3L2/3,where Y is the amount of output, K is the amount ofcapital, L is the amount of labor, and A is a parameterthat measures the state of technology. For this productionfunction, the marginal product of labor isMPL 5 (2/3) A(K/L)1/3.Suppose that the price of output P is 2, A is 3, K is1,000,000, and L is 1,000. The labor market is competitive,so labor is paid the value of its marginal product.a. Calculate the amount of output produced Y and thedollar value of output PY.b. Calculate the wage W and the real wage W/P. (Note:The wage is labor compensation measured in dollars,whereas the real wage is labor compensationmeasured in units of output.)c. Calculate the labor share (the fraction of the value ofoutput that is paid to labor), which is (WL)/(PY).d. Calculate what happens to output Y,…
Define factors of production and describehow they contribute to output.
Use the below graph to answer the question: Output per labour Production D function 3 Production function 2 B Production function 1 A E Capital per labour Which of the following events will lead the economy to move from point A to E? O a. A permanent increase in soil salinity levels which reduces agricultural output. O b.A drop in export demand. C. Some infrastructure is destroyed by an earthquake. O d. An increase in income tax. O e. The retirement of unproductive machines.
Consider a simple economy of Korea - producing two goods, Motor bike and milk. The details ofthe economy and its production is as follows: Motor Bike (1000 / year) Milk (1000 gallons per year) 0 601 502 303 0 d) According to the (BGH) technology, farmers can now get double the amount of milk fromcows easily. In terms of PPF, this means Korean economy can now produce twice milk ateach level of bike output. With the current production of 2000 motor bikes, Mr. B claimsthat this new technology can allow this economy to produce more milk and more bikes. Doyou agree with this statement or not?e) Explain carefully, with the help of diagram and justify your answer.
Hi can you please help with following questions I am not sure how to solve them please assist with question A You are the sole survivor of a shipwreck on a desert island. You do not expect to be rescued.You can either use your time to grow food to consume immediately, or to build new tools andbuildings (capital) which will increase your supply of food in future years. a) Sketch your initial production function (total output of food + capital in terms of yourlabour input), and show how to turn this into a feasible set. Show your optimal choiceof how you spend your time, assuming you initially consume everything you produce.
QUESTION 4 Capital per year K₂ Figure 7.3.2 4₂ L₂ C₁ Labor per year Refer to Figure 7.3.2 above. Which of the following changes, which causes the move from A to B? O a. The quantity to be produced Ob. A decrease in the cost of capital r Oc. The budget of the producer d. A decrease in the wage rate w
“In the production process, it may be expected that a progressive increase in the input results in a similar increase in the output”. Comment
Draw an example production function in terms of output and capital.GIVE 2 specific properties which define its shape; explain these usingthe definition and properties of MPK.
Assume an economy where there are two producers: a wheat producer and a bread producer. In agiven year, the wheat producer grows 3 million tonnes of wheat, of which 2.5 million tonnes aresold to the bread producer at $30 per bushel, and 0.5 million tonnes are stored by the wheatproducer to use as seed for next years crop. The bread producer produces and sells 100 millionloaves of bread to consumers for $3.50 per loaf. Determine GDP in this economy during this yearusing the product and expenditure approaches.
O ECON1003 Undergraduate x b My Questions | bartleby 9 maths course guide.pdf O How to screen shot on my X i 2021.tle.courses.open.uwi.edu/pluginfile.php/2265/mod_resource/content/13/ECON1003%20Undergraduate%20Programmes-%... ECON1003 Undergraduate Programmes- 2021-2.. 25 / 36 100% + | Problem Set: B (1) Solve the following: (i) 2*/2-16 32 (ii) log, (x- 2)+log,(x) =1 (b) The demand curve for a swivel chair is given by p=4000(3-ª) dollars per swivel chair, where p is the price and q is the quantity, in thousands of swivel chair, demanded at that price. What quantity will be demanded if the price per swivel chair is $256.60? (2) Find the slope-intercept form for the line perpendicular to 2x– 3y=-6 and passing through (4,–9) (3) A mobile phone provider charges $3.75 plus $0.15 per minute for overseas calls. (a) Write a linear model which shows the cost C, in dollars, for a client talking x minutes. (b) How much would it cost the client for an overseas call with a duration of 55 minutes?…