Estimates of the maximum amounts of output

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The following production table provides estimates of the maximum amounts of output possible with different combinations of two input factors, X and Y.  (Assume these are just illustrative points on a spectrum of continuous input combinations.)

  Estimated Output per Day

5

184

265

334

395

440

4

176

248

303

352

395

3

164

216

264

303

334

2

128

176

216

248

265

1

88

128

164

176

184

 

1

2

3

4

5

a. List the different combinations of inputs X and Y that, if graphed, would illustrate an isoquant for an output of 176.

b. Assuming that output sells for $3 per unit and X is fixed at 5 units, complete the following table:

Units of Y employed

Total Product

Of Y

Marginal Product of Y

Value Marginal Product of Y

1

184

184

 

2

 

 

 

3

 

69

 

4

 

 

183

5

440

 

 

c. Assuming the cost of Y is $200 per unit, how many units of Y should optimally be employed? Explain how you reached your answer.

d. Suppose that the cost of units of both input X and input Y are the same at $200 per day. Describe how isocost curves for a cost of $200 and also for a cost of $270 would look in terms of position and slope.

Reference no: EM13143885

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