(Figure: Clothing and Food I) Suppose the food industry is using 3 units of capital and 5 units of labor as inputs, while the clothing industry is using 2 units of capital and 3 units of labor as inputs. The economy's output of food is units and the output of clothing is units. Capital inputs for food- B 0 7 1 Labor inputs for clothing 6 5 4 3 2 Q-100 Qc=40 2 3 4 5 Labor inputs for food- O less than 100; less than 40 O greater than 100; greater than 40 O less than 100; greater than 40 O greater than 100; less than 40 6 0 7 8 Capital inputs for clothing

(Figure: Clothing and Food I) Suppose the food industry is using 3 units of capital and 5 units of labor as inputs, while the clothing industry is using 2 units of capital and 3 units of labor as inputs. The economy's output of food is units and the output of clothing is units. Capital inputs for food- B 0 7 1 Labor inputs for clothing 6 5 4 3 2 Q-100 Qc=40 2 3 4 5 Labor inputs for food- O less than 100; less than 40 O greater than 100; greater than 40 O less than 100; greater than 40 O greater than 100; less than 40 6 0 7 8 Capital inputs for clothing

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter2: Thinking Like An Economist

Section: Chapter Questions

Problem 2CQQ

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An economy can produce leather using labor and capital and wheat using labor and land. The total supply of labor is 50 units. Given the supply of capital, the outputs of the two goods depend on labor input as follows: Labor Input to Leatheroutput of LeatherLabor Input of WheatOutput of Wheat 27 5 19.8 10 38.5 10 31.2 15 47.3 15 42.3 20 56 20 52.1 25 65.7 25 60.6 30 74.5 30 69 35 82.4 35 77.4 40 88.2 40 85.4 45 94.1 45 93.9 50 100 50 100 a. Graph the production functions for leather and wheat. b. Graph the production possibility frontier. What will happen if more labor is employed?
1.Explain how a firm uses resources price and value data to determine the appropriate combination of capital and labor resources to use in order to maximize profits. 2.how does this change when the firm want to produce a specific quantity of product with the least cost combination of resources? 3. if a software firm estimates that the MP of labor is 3 apps per month and the price is labor is $1100 per month, while the MP of capital is 5apps per month and its price is $2000, should the firm hire more labor and decrease its capital use or increase its use of capital and use fewer labor resources?
17. For a certain good the production function is given by the equation q = q²qc, where q is the produced output in units of 1000 and qL and qc are the number of units of labour and of capital invested in the production process. Assume that one unit of labour costs 10 units of money and one unit of capital costs 5 units of money. (a) Show on a graph which combinations (qL, qc) generate exactly 64 000 units of output. Put qL on the horizontal axis of the graph and qc on the vertical axis. (b) Explain how one can see on the graph of part a which combinations (qL, qc) allow to produce 64 000 units using a budget of exactly 100 units of money. (c) Explain how one can see on the graph of part a which combinations (qL, qc) allow to produce 64 000 units in the cheapest possible way.
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(Figure: Recliners and Couches) American Signature is a furniture company based in Columbus, Ohio. The graph represents American Signature's production possibility frontier for manufacturing couches and recliners. If American Signature manufactures 100,000 couches and 400,000 recliners, the company's use of resources would be , and the company could production. Ⓒa. inefficient; decrease Ob. efficient, increase O c. efficient; decrease Od. inefficient; increase
1 Assume corn is sellling for $6.71 per bushel in greenville, MS, and selling $6.68 per bushel in Cairo,IL. Further assume that the transfer costs between these two points is $0.16 per bushel. What would you do? In your answer identify and descibe the economic concept driving this relationship.
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As an economist it is important to know that resources are scarce. Explain what u understand that resources arenscarce in economic terms
Prunella raises peaches where L is the number of units of labor she uses and T is the number of units of land she uses. Her output is f(L,T) = LT bushels of peaches. Currently, the cost of land is 8, the wage for labor is 9, and the price of peaches is 10. Prunella is currently maximizing her profits. Which occurences would cause the quantity of labor used to decrease? O An increase in the price of peaches O A increase in the price of labor O An increase in the Marginal Product of Labor O All of the above
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10 a 16 5 12 — P=$/Q 100 95 90 85 80 75 70 65 60 SSSSSSSOS 45 40 35 M3221150 43 D before stay at home order Q of toilet paper 15 Dafter stay at home order The graph shows the market for toilet paper in Michigan. Based on the graph, we know that the production of toilet paper experiences diminishing returns to the variable input. Explain how we know and what this means.
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