Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 50 dresses per day, using labor and electricity. She uses a combination of labor and electricity that produces 50 dresses per day in the cheapest possible way. She can hire as much labor as she wants at a cost of 20 cents per minute. She can use as much electricity as she wants at a cost of 10 cents per minute. Her production isoquants are smooth curves without kinks and she uses positive amounts of both inputs.
Question 6 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 kilowatt-hour of electricity.
c)
The marginal product of a kilowatt-hour 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 kilowatt-hour of labor must equal 50/(20+10).
e)
The marginal product of a minute of labor is twice the marginal product of a kilowatt-hour of electricity.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Analysis Of Economic Data

Authors: Gary Koop

3rd Edition

0470713895, 9780470713891

More Books

Students also viewed these Economics questions

Question

7. Understand the challenges of multilingualism.

Answered: 1 week ago

Question

5. Give examples of variations in contextual rules.

Answered: 1 week ago