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Roberta runs a dress factory. She produces 5 0 dresses per day, using labor and electricity. She uses a combination of labor and electricity that
Roberta runs a dress factory. She produces dresses per day, using labor and electricity. She uses a combination of labor and electricity that produces dresses per day in the cheapest possible way. She can hire as much labor as she wants at a cost of cents per minute. She can use as much electricity as she wants at a cost of cents per minute. Her production isoquants are smooth curves without kinks and she uses positive amounts of both inputs.
Question options:
a
There is not enough information to determine the ratio of marginal products. We'd have to know the production function to know this.
b
The marginal product of a minute of labor is equal to the marginal product of a kilowatthour of electricity.
c
The marginal product of a kilowatthour of electricity is twice the marginal product of a minute of labor.
d
The marginal product of a minute of labor plus the marginal product of a kilowatthour of labor must equal
e
The marginal product of a minute of labor is twice the marginal product of a kilowatthour of electricity.
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