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Brewing Given that there are already two coffee machines available for production, the firm has to choose between skilled and unskilled workers considering that a
Brewing Given that there are already two coffee machines available for production, the firm has to choose between skilled and unskilled workers considering that a skilled worker would brew 60 coffees in one hour, and an unskilled worker would only brew 30 coffees in one hour. a) What is the production function that would describe this production process? Use S and L to represent the number of hours worked by skilled and unskilled workers respectively. b) Determine, using the lambda method, whether this production function exhibits increasing, decreasing or constant returns to scale. c) Illustrate the isoquant for this production function for Q = 60 by placing L on the horizontal axis and S on the vertical axis. d) What is the MRTSL,S? e) If the wage of a skilled worker is $24 per hour and the wage of unskilled labor is $15 per hour, which workers should Alice's Caf' hire? Support your answer by including the lowest isocost on the graph of part c). f) Derive a cost function as a function of Q for the brewing production stage
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