3. Least-cost combination of inputs using isoquants Suppose you are a department manager in a large software firm, and you have an assignment to produce a customized database for a client in the next week. Your boss asks you to find the least costly way to produce the database. To produce the database, you'll need to use computers and programmers. The blue isoquant curve on the following graph shows the combinations of computers and programmers that you can use to create the database in a week. 10 A TC CAPITAL (Number of computers) N 5 10 LABOR (Number of programmers) Each computer has a rental rate of $300 per week (r = $300), and each programmer costs $300 per week (w = $300). Calculate the cost of each of the purple points (diamond symbols) on the isoquant curve on the preceding graph. The least-cost input combination is and for a total cost ofmework (un 10 4 TC CO CAPITAL (Number of computers) N 5 LABOR (Number of programmers) Each computer has a rental rate of $300 per week (r = $300), and each programmer costs $300 per week (w = $300). Calculate the cost of each of the purple points (diamond symbols) on the isoquant curve on the preceding graph. The least-cost input combination is and , for a total cost of 4 programmers On the preceding graph, use the gr mbol) to show the line of equal total cost (TC) indicating the possible combinations of 6 programmers computers and programmers that Hint: For example, if you've found 2 programmers sive option for completing the database costs $1,000, then you should plot the combinations of computers and programmers that c 10 programmers To minimize costs, you know that the rate of technical substitution of labor for capital must be equal to at this point, given the stated wage and rental rate of capital.10 A TC CAPITAL (Number of computers) N 3 5 6 10 LABOR (Number of programmers) Each computer has a rental rate of $300 per week (7 = $300), and each programmer costs $300 per week (w = $300). Calculate the cost of each of the purple points (diamond symbols) on the isoquant curve on the preceding graph. The least-cost input combination is and , for a total cost of 2 computers On the preceding graph, use the green line (triangle symbol) to equal total cost (TC) indicating the possible combinations of 1 computer computers and programmers that minimizes total costs. 5 computers Hint: For example, if you've found that the least expensive opti ng the database costs $1,000, then you should plot the combinations of computers and programmers that cost $1,000. 0 computers To minimize costs, you know that the rate of technical substitution of labor for capital must be equal to_ _ at this point, given the stated wage and rental rate of capital.10 8 TC CAPITAL (Number of computers) N 3 5 7 9 10 LABOR (Number of programmers) Each computer has a rental rate of $300 per week (7 - $300), and each programmer costs $300 per week (w = $300). Calculate the cost of each of the purple points (diamond symbols) on the isoquant curve on the preceding graph. The least-cost input combination is and . for a total cost of 2,100 On the preceding graph, use the green line (triangle symbol) to show the line of equal total cost (TC) in he possible combinations of computers and programmers that minimizes total costs. $600 Hint: For example, if you've found that the least expensive option for completing the database costs $ $1,800 n you should plot the combinations of computers and programmers that cost $1,000. 2,400 To minimize costs, you know that the rate of technical substitution of labor for capital must be equal to 1.00 . at this point, given the stated wage and rental rate of capital.10 4 TC CAPITAL (Number of computers) w N 2 3 5 7 8 LABOR (Number of programmers) Each computer has a rental rate of $300 per week (7 = $300), and each programmer costs $300 per week (w) - $300). Calculate the cost of each of the purple points (diamond symbols) on the isoquant curve on the preceding graph. The least-cost input combination is and for a total cost of On the preceding graph, use the green line (triangle symbol) to show the line of equal total cost (TC) indicating the possible combinations of computers and programmers that minimizes total costs. Hint: For example, if you've found that the least expensive option for completing the database costs $1 0.80 pen you should plot the combinations of computers and programmers that cost $1,000. 1.00 To minimize costs, you know that the rate of technical substitution of labor for capital must be equal to 1.00 at this point, given the stated wage and rental rate of capital. Grade It Now Save & Continue