Homework assignments are used to impart decper understanding and are used as learning by doing tool. I do not want you to lose any points for homework just because you do not know how to solve it. If you have difficulty, I will Duc Bac oven help you. Please remember that understanding these problems is essential to perform well in the mid term exams. 1. A textile manufacturing company is planning to open a new factory. The company can produce textiles using a large number of machines and a small number of workers or using a small number of machines and large number of workers. Assume that the company wants for produce one thousand square feet of textiles per day. This quantity can be produced by different combinations of machines and workers. Assume that any of the following combinations: 2 machines and 28 workers, 4 machines and 16 workers, 8 machines and 8 workers, 16 machines and 4 workers, or 28 machines and 2 workers can be used to make 1000 square feet of textiles [HINT: These combinations provide the isoquant). Please use the graph on page 2 to plot the isoquant and isocost lines (plot isocost line for the total cost you calculate for each problem]. (30 points) L-M S-W OP S-M L-W are tie: a. RE 1,000 sq.ft Draw the isoquant for producing 1000 square feet of textiles on the graph in next page. dowy b. Assume that the price a machine is $100 and the wage for a worker is $ 100 per day. Draw the isocostline and find out the total cost of production and cost minimizing levels of capital and labor at this price level. Cost minimizing level of capital Cost minimizing level of labor Total cost of production I : : c. Now assume that the price of a machine is $100 and wage for a worker is $ 300 per day. Draw the isocostline and find out the total cost of production and cost minimizing levels of capital and labor at this price level. Cost minimizing level of capital Cost minimizing level of labor Total cost of production : : : d. Now assume that the price of a machine is $300 and wage for a worker is $ 100 per day. Draw the isocostline and find out the total cost of production and cost minimizing levels of capital and labor at this price level. Cost minimizing level of capital Cost minimizing level of labor Total cost of production : . Homework 5 AGBU 2317 Fall 2021 Homework assignments are used to impart decper understanding and are used as learning by doing tool. I do not want you to lose any points for homework just because you do not know how to solve it. If you have difficulty, I will Duc Bac oven help you. Please remember that understanding these problems is essential to perform well in the mid term exams. 1. A textile manufacturing company is planning to open a new factory. The company can produce textiles using a large number of machines and a small number of workers or using a small number of machines and large number of workers. Assume that the company wants for produce one thousand square feet of textiles per day. This quantity can be produced by different combinations of machines and workers. Assume that any of the following combinations: 2 machines and 28 workers, 4 machines and 16 workers, 8 machines and 8 workers, 16 machines and 4 workers, or 28 machines and 2 workers can be used to make 1000 square feet of textiles [HINT: These combinations provide the isoquant). Please use the graph on page 2 to plot the isoquant and isocost lines (plot isocost line for the total cost you calculate for each problem]. (30 points) L-M S-W OP S-M L-W are tie: a. RE 1,000 sq.ft Draw the isoquant for producing 1000 square feet of textiles on the graph in next page. dowy b. Assume that the price a machine is $100 and the wage for a worker is $ 100 per day. Draw the isocostline and find out the total cost of production and cost minimizing levels of capital and labor at this price level. Cost minimizing level of capital Cost minimizing level of labor Total cost of production I : : c. Now assume that the price of a machine is $100 and wage for a worker is $ 300 per day. Draw the isocostline and find out the total cost of production and cost minimizing levels of capital and labor at this price level. Cost minimizing level of capital Cost minimizing level of labor Total cost of production : : : d. Now assume that the price of a machine is $300 and wage for a worker is $ 100 per day. Draw the isocostline and find out the total cost of production and cost minimizing levels of capital and labor at this price level. Cost minimizing level of capital Cost minimizing level of labor Total cost of production : . Homework 5 AGBU 2317 Fall 2021
