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Ariel's Wheats Farm has the following production function: Q-8-TLarge + 4-TSmall where T stands for tractors. The cost of tractors are $7,500 for large
Ariel's Wheats Farm has the following production function: Q-8-TLarge + 4-TSmall where T stands for tractors. The cost of tractors are $7,500 for large ones and $2,500 for small ones. If the marginal products are 8 for large tractors and 4 for small tractors, which type will the firm use? The firm will use only small tractors The firm will use only large tractors The firm is indifferent between using large or small tractors Now, suppose the cost of tractors changes to $76,000 for large ones and $9,500 for small ones. If Ariel's Wheats Farm decides to produce 640 (in thousands) products, then how many units of tractors will be used? Ariel's Wheats Farm will use Number units of large small tractors.
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