Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Total cost of Factor Combinations?
Here we try to find total cost of every factor combination and choose the one that has the least cost. Cost of every factor combination is found by multiplying the price of each factor by its quantity and then summing it for all inputs. This is explained in Table below.
Table: Choosing the Lowest Cost of Production Technique
Technique
Capital
(units)
Labour
Capital Cost
Rs.
Labour Cost
Total Cost
1
2
3
4
5
6
A
10
500*6=3000
400*10=4000
7000
B
14
500*2=1000
400*14=5600
6600
It is presumed that 100 pairs of shoes are produced per week and price of capital and wage of labour are 500$ and 400$ per week respectively. In order to make analysis, we presume that there are only two technically efficient methods of producing shoes and they are labelled A and B.
The table illustrates that total cost of producing 100 pairs of shoes is7000$ per week by using technique A and 6600$ per week using technique B. Firm will choose technique B that is an economically efficient (or lowest cost) production technique at the factor prices presumed in the above illustration.
If either of the factor prices alters equilibrium proportion of the factors would also change so as to use less of those factors which display a price rise. Consequently we will have a new optimal combination of factors. This can again be found out by calculating cost of different factor combinations with new factor prices and choosing the one which costs the least.
CHARACTERISTICS OF THE THREE STAGES Stage I Here the Total Physical Product, Average Physical Product and Marginal Physical Product are all increasing. However MPP
Individual and market demand schedule The plan of the possible quantities that will be demanded at different prices by an individual is called Individual demand schedule. Su
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
arguments in favour of traditional theory of profit maximization
Give short answer of following (a) Economics as a science. (b) Engineering Economics. (c) Economic Problem. (d) Meaning and characteristics of utility. (e)
Compare the price elasticity at two parallel demand curves at a given price. This has been explained in Fig above where two demand curves AB and CD are given that are parallel to e
Monetary Theory We have seen that Schumpeter theory which runs in terms of innovations and technical change, is at best an incomplete explanation of trade cycle . there are eco
Demand Schedule The law of demand can be explained through a demand schedule. A demand schedule is a series of quantities that consumers would like to buy per unit of time at d
example problems for the types of pricing
Average Total Costs (ATC) This is total cost per unit of output, obtained by dividing total cost by total output i.e. ATC = Total Cost Total Outp
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd