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Sleak Teak Builds Yard Furniture, Using Domestic Hardwoods and (In

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Sleak Teak builds yard furniture, using domestic hardwoods and (in a smaller shop) handcrafted knick-knacks from the same sort of wood. Although hardwoods were readily available in the past, recently they have been much more difficult to obtain. Consultation with the plant managers of the two lines has resulted in the following production functions for hardwood usage in the two products. For yard furniture: Y = 2TY - .001TY2, while for Knick-knack: K = 20TK - .01TK2. Here Y and K denote units of the two types of products and TY and TK denote teak used in yard furniture and knick-knacks respectively. Yard furniture can be sold at a profit of $100 per unit, and knick-knacks can be sold at a profit of $25 each. Sleak Teak has 1,300 units of teak available. How should it be allocated across the two products? Explain.

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The marginal products of teak in the two...

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