1) Monday, November 15 A firm produces two outputs, X and Y, using three inputs, A, B, and C. Outputs X and sell for $6 and $5, respectively. Each unit of X requires 2 units of A, 3 units of B, and 2 units of C to produce. Each unit of Y requires 1 unit of A, 2 units of B, and 2 units of to produce. The firm has 18 units of A, 36 units of B, and 24 units of C available. a) Solve the firm's profit maximization problem in Excel. What is the firm's optimal production plan and maximum profit? b) Draw a figure similar to that on slide 20 of Chapter 8 of the lecture overheads that illustrates the optimal solution, except draw only the single isoprofit line passing through the optimal production plan. Be sure to shade the feasible region. c) What are the X and Y axis intercepts of the isoprofit line passing through the optimal production plan? What are the corner points of the feasible region? e) What are the shadow prices of inputs A, B, and C? 1) What is the implicit cost of the inputs used to produce one unit of X? g) What is the implicit cost of the inputs used to produce one unit of Y? Hint: This problem has a structure similar to "Productin Problem 1" studied in Chapter 8. All numerical answers are whole numbers, if you get answers with fractional parts, you have made a mistake. A firm must combine two ingredients, X and Y, so as to provide prescribed amounts of and Inanodionte Y and Y cost $6 and 59 mer nound respectively 2) 1) Monday, November 15 A firm produces two outputs, X and Y, using three inputs, A, B, and C. Outputs X and sell for $6 and $5, respectively. Each unit of X requires 2 units of A, 3 units of B, and 2 units of C to produce. Each unit of Y requires 1 unit of A, 2 units of B, and 2 units of to produce. The firm has 18 units of A, 36 units of B, and 24 units of C available. a) Solve the firm's profit maximization problem in Excel. What is the firm's optimal production plan and maximum profit? b) Draw a figure similar to that on slide 20 of Chapter 8 of the lecture overheads that illustrates the optimal solution, except draw only the single isoprofit line passing through the optimal production plan. Be sure to shade the feasible region. c) What are the X and Y axis intercepts of the isoprofit line passing through the optimal production plan? What are the corner points of the feasible region? e) What are the shadow prices of inputs A, B, and C? 1) What is the implicit cost of the inputs used to produce one unit of X? g) What is the implicit cost of the inputs used to produce one unit of Y? Hint: This problem has a structure similar to "Productin Problem 1" studied in Chapter 8. All numerical answers are whole numbers, if you get answers with fractional parts, you have made a mistake. A firm must combine two ingredients, X and Y, so as to provide prescribed amounts of and Inanodionte Y and Y cost $6 and 59 mer nound respectively 2)
