You are a department manager in a large consulting firm, and you have an assignment to produce a customized automated billing system for a client in the next week. Your boss asks you to find the least costly way to produce the billing system.
In order to produce the billing system, you'll need to use computers and programmers. The blue isoquant curve on the following graph shows the combinations of computers and programmers that you can use to create the billing system in a week.
Which of the following are not combinations of programmers and computers that could produce the billing system within the time allotted? Check all that apply. Four programmers and two computers Two programmers and five computers Two programmers and four computers Four programmers and three computers Each computer costs $600 per week and each programmer costs $600 per week. Suppose your boss gives you a budget of $1,200 to spend on the project. (In other words, your boss wants the total cost of this project to equal \$1,200.) On the previous graph, using the purple line (diamond symbols), plot the possible combinations of inputs you could afford-that is, plot your $1,200 isocost line. What should you tell your boss about completing the billing system in a week with a budget of $1,200? "Sure, this won't be a problem." "That's very generous, but we don't need such a large budget to complete the project." "I can't complete the project by next week if that's all the money I can spend on it." The least-cost input combination is and , for a total cost of . (Hint: Calculate the cost of each of the blue points (circle symbols) on the isoquant curve on the previous graph.) On the previous graph, use the green line (triangle symbols) to plot the isocost line showing the possible combinations of computers and programmers you could use for your cost-minimizing budget. For example, if you've found that the least expensive option for completing the automated billing system costs $1,000, then you should plot a $1,000 isocost line. Which of the following are not combinations of programmers and computers that could produce the billing system within the time allotted? Check all that apply. Four programmers and two computers Two programmers and five computers Two programmers and four computers Four programmers and three computers Each computer costs $600 per week and each programmer costs $600 per week. Suppose your boss gives you a budget of $1,200 to spend on the project. (In other words, your boss wants the total cost of this project to equal \$1,200.) On the previous graph, using the purple line (diamond symbols), plot the possible combinations of inputs you could afford-that is, plot your $1,200 isocost line. What should you tell your boss about completing the billing system in a week with a budget of $1,200? "Sure, this won't be a problem." "That's very generous, but we don't need such a large budget to complete the project." "I can't complete the project by next week if that's all the money I can spend on it." The least-cost input combination is and , for a total cost of . (Hint: Calculate the cost of each of the blue points (circle symbols) on the isoquant curve on the previous graph.) On the previous graph, use the green line (triangle symbols) to plot the isocost line showing the possible combinations of computers and programmers you could use for your cost-minimizing budget. For example, if you've found that the least expensive option for completing the automated billing system costs $1,000, then you should plot a $1,000 isocost line
