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Assume that fruit picking can be done by children or adults, but that adults are twice as efficient as children (they pick twice as fast).
- Assume that fruit picking can be done by children or adults, but that adults are twice as efficient as children (they pick twice as fast). The production function for fruit-picking is thus
When output is measured in bushels of apples, labor is measured in days, so labor is days of adult/children labor input.
- Depict the isoquants for a typical orchard in terms of fruit-picking.
- Assume the wage rate of adults is $100 per day, and the wage for children is $60 per day. Show the isocost lines.
- Show the profit-maximizing input choice where the profit-maximizing output is 1000 bushels of apples. Depict the scale and substitution effects if the wage of child labour falls to $25 per day. What does the demand curve for child labor look like?
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