#12

12. Mad Max's Road Warriors fix potholes in interstate highways. Max's road crews fill potholes using workers and shovels in 1 to 1 correspondence. A worker with 1 shovel can fill 10 potholes in a day. A worker with 2 shovels can still only fill 10 potholes, as can 2 workers with 1 shovel. a. Draw the production isoquant corresponding to filling 30 potholes. b. Assume that production displays constant returns to scale and draw a few more isoquants. c. If shovels rent for $5 and workers must be paid $25, draw several isocost lines. d. If Mad Max has receivedya state contract to fill 30 potholes, what is the minimum cost at which it can fulfill the contract? e. If the cost of renting a shovel suddenly rises from $5 to $6, what will happen to the composition of inputs that Mad Max uses to fill potholes? Why