Question
Capital and labor are used in fixed proportions to produce airline flights. It takes two pilots and one plane for each trip made. Technical and
Capital and labor are used in fixed proportions to produce airline flights. It takes two pilots and one plane for each trip made. Technical and safety problems make it impossible for a single pilot to fly the plane.
a. Illustrate isoquants for flights produced with pilots on the x-axis.
b. Suppose an airline hired 30 pilots and 10 planes during a particular period.
Explain both graphically and in words they this might be a foolish thing to do.
c. Suppose progress in avionic equipment makes it possible for a single pilot to
handle each plane. How would that shift the isoquant map described in (a)?
d. Would this progress raise the average productivity of labor in this industry?
Would it raise the average productivity of capital (planes)? Explain.
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