Ditch-digging firm that has five backhoes

Assignment Help Microeconomics
Reference no: EM13698912

Suppose that for a firm that digs ditches for laying cable or pipeline, backhoes and backhoe operators are pure complements in production, being used on a one-for-one basis. Draw the isoquants (on a graph with backhoe, “K”, and backhoe operators, “E”, on the axes) for the production of three different quantities of ditches. Do they have a “funny” shape?

a) Now consider one such ditch-digging firm that has five backhoes but employs six backhoe operators. Can you explain why this might make sense?

(Hint: think about whether/how the marginal product of the sixth backhoe operator could be positive)

b) Now suppose you see another ditch-digging firm that has seven backhoes but employs six backhoe operators. How could this make sense?

Reference no: EM13698912

Questions Cloud

Firm reinvest in advertising to maximize profits : A monopolist estimated that the own-price elasticity of demand for its product is -4.5 and its advertising elasticity of demand is 1.5. Assuming these elasticities are constant, what fraction of the firm's revenues should the firm "reinvest" in adver..
Tissue plasminogen activator : Genentech owns a patent on tissue plasminogen activator (TPA), which is an enzyme that helps the body break down blood clots. TPA is particularly valuable to cardiac patients, since it often allows heart problems to be treated with medication rather ..
What toll needs to be charged to break even : A 100 KM toll way costs $5M per km to build. The bonds are for 20 years and pay 10 percent per year [(A/P, 10%,20) = 0.1175]. If annual maintenance costs are $1000 per km, and 20000 vehicles use the toll way every day, what toll needs to be charged t..
Cost function have increasing or decreasing returns to scale : Suppose the production function for pasta is Q = 4kl. What is the long-run optimal input combination when Q = 16 , r = 4 , and w = 36 ? What is the long-run total cost function when r = 4 and w = 36?
Ditch-digging firm that has five backhoes : Suppose that for a firm that digs ditches for laying cable or pipeline, backhoes and backhoe operators are pure complements in production, being used on a one-for-one basis. Draw the isoquants (on a graph with backhoe, “K”, and backhoe operators, “E”..
Write the equation for the medical isocost of afc : Presently, AFC has on its medical staff 10 doctors and 10 nurses. The daily wage of a doctor is $600, whereas a nurse is paid only $200 a day. Write the equation for the medical isocost of AFC.
What is their short run optimal input combination : Suppose production function for noodle soup at Slurping Turtle is Q =4k^1/2 L^1/2. They currently own 4 units of capital and are not able to change this during the short run. The rental rate of capital is $10 and the wage rate is $20. Suppose Slurpin..
What is the long-run total cost function : Suppose the production function for oranges is Q = k^1/3 L^1/3. What is the labor demand function when Q = 4 and r = 9 ? What is the capital demand function when Q = 4 and w = 4 ?
Estimate that the annual net revenues : The Port Authorities of New York and New Jersey estimate that the annual net revenues for the George Washington Bridge (GWB) will total $13M by the end of this year (t=1). At the end of three years (t=4) you expect a toll increase of 10%. Revenues wi..

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Explain long run equilibrium for monopolistic competition.

Graph the long run equilibrium for perfect competition. Using a similar average cost curve, graph the long run equilibrium for monopolistic competition.

  What kind of crisis was latvia experiencing

What kind of crisis was Latvia experiencing in 2008, a currency crisis, a banking crisis, or a debt crisis? If the IMF had not stepped in with support, what do you think might have occurred?

  Net investment-structural unemployment a greater problem

If Net Investment = 0 that means that we have neither lost nor gained capital in a given year. What is wrong with that? Why is structural unemployment a greater problem for older workers than it might be for younger workers? Economic growth is not re..

  Extended warranty problem

Chris is renting a house, and it does not have a refrigerator. A refrigerator is worth $2 every day because Chris will eat out less. Chris has a discount rate of 20 percent. Refrigerators usually last five years. How much is Chris willing to spend on..

  General instructions the modeling project for this course

general instructions the modeling project for this course is intended to give you hands on experience to construct an

  When the price of a good is 5 the quantity demanded is 100

when the price of a good is 5 the quantity demanded is 100 units per month when the price is 7 the quantity demanded is

  Speculative bubble occurs-progressive tax is a tax

The estate tax attempts to promote equity in the distribution of income and wealth by: A speculative bubble occurs when: A progressive tax is a tax that: Expansionary monetary and fiscal policies are used by policy makers in a recession to: The socia..

  Wat effect should each of given have upon demand for

what effect should each of the following have upon the demand for portable music players in a competitive market?

  What would be its equilibrium profit

A monopolistic firm faces the following demand curve. Q = 7800 -12 P This monopoly's cost function has been estimated as follows: TC = 460,000 + 50 Q What price should this monopoly charge to maximize its profit? What would be its equilibrium profit?..

  Maintain the par value of an under-valued exchange rate

In a diagram, show how the central bank maintain the par value of an under-valued exchange rate in a fixed exchange rate currency regime. Provide a short explanation.

  From perspective of the social planner with utilitarian

andy and beth are neighbors in a small duplex. in the evenings after work andy enjoys practicing the tuba while beth

  The lead it management role at magnum

Six months after you take over the lead IT management role at Magnum

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd