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Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
Edition 12ISBN: 978-1133189022 Exercise 26
Suppose that the hourly output of chili at a barbecue (q, measured in pounds) is characterized by 
where K is the number of large pots used each hour and L is the number of worker hours employed.
a. Graph the q = 2,000 pounds per hour isoquant.
b. The point K = 100, L = 100 is one point on the q = 2,000 isoquant. What value of K corresponds to L = 101 on that isoquant? What is the approximate value for the RTS at K = 100, L = 100?
c. The point K = 25, L = 400 also lies on the q = 2,000 isoquant. If L = 401, what must K be for this input combination to lie on the q = 2,000 isoquant? What is the approximate value of the RTS at K = 25, L = 400?
d. For this production function, the RTS is
RTS = K/L
Compare the results from applying this formula to those you calculated in part b and part c. To convince yourself further, perform a similar calculation for the point K = 200, L = 50.
e. If technical progress shifted the production function to
all of the input combinations identified earlier can now produce q = 4,000 pounds per hour. Would the various values calculated for the RTS be changed as a result of this technical progress, assuming now that the RTS is measured along the q = 4,000 isoquant?
where K is the number of large pots used each hour and L is the number of worker hours employed.
a. Graph the q = 2,000 pounds per hour isoquant.
b. The point K = 100, L = 100 is one point on the q = 2,000 isoquant. What value of K corresponds to L = 101 on that isoquant? What is the approximate value for the RTS at K = 100, L = 100?
c. The point K = 25, L = 400 also lies on the q = 2,000 isoquant. If L = 401, what must K be for this input combination to lie on the q = 2,000 isoquant? What is the approximate value of the RTS at K = 25, L = 400?
d. For this production function, the RTS is
RTS = K/L
Compare the results from applying this formula to those you calculated in part b and part c. To convince yourself further, perform a similar calculation for the point K = 200, L = 50.
e. If technical progress shifted the production function to
all of the input combinations identified earlier can now produce q = 4,000 pounds per hour. Would the various values calculated for the RTS be changed as a result of this technical progress, assuming now that the RTS is measured along the q = 4,000 isoquant?
Explanation
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The hourly output of chili at a barbecue...
Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder
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