Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 12.A, Problem 1QE
To determine
Determine the changes in the marginal rate of substitution, when a firm increases the use of one input, keeping the output constant.
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Consider a firm that produces output using industrial robots and skilled labor. Suppose it is the case
that a reduction in the price of industrial robots causes the firm's labor demand curve for skilled
workers to increase (i.e., to shift to the right). This implies that:
There is diminishing marginal product of robots.
O There is diminishing marginal product of skilled labor.
O Robots and skilled labor are complements.
O Robots and skilled labor are substitutes.
The unit cost of skilled labor is below the unit cost of robots.
IV.
Will can produce a higher grade, Gw, on an upcoming
economic exam by studying. His production function depends
on the number of hours he studies marginal analysis problems,
A, and the number of hours he studies supply and demand
problems, R. Specifically, Gw = 2.5A0.36R 0.64. His roommate
David's grade production function is G) = 2.5A0.25R0.75
a. What is Will's marginal productivity from studying
supply and demand problems? What is David's?
b. What is Will's marginal rate of technical substitution
between studying the two types of problems? What is
David's?
Bulldog, Inc. measures the technical rate of substitution at ???/??? = 3. The prices of labor and capital faced by Bulldog are such that currently ??/?? = 4. Is Bulldog producing its current level of output at the minimum cost? If not, how could they do better? Very briefly explain your answer.
Chapter 12 Solutions
Microeconomics
Ch. 12.1 - Prob. 1QCh. 12.1 - Prob. 2QCh. 12.1 - Prob. 3QCh. 12.1 - Prob. 4QCh. 12.1 - Prob. 5QCh. 12.1 - Prob. 6QCh. 12.1 - Prob. 7QCh. 12.1 - Prob. 8QCh. 12.1 - Prob. 9QCh. 12.1 - Prob. 10Q
Ch. 12.A - Prob. 1QECh. 12.A - Prob. 2QECh. 12.A - Prob. 3QECh. 12.A - Prob. 4QECh. 12.A - Prob. 5QECh. 12.A - Prob. 6QECh. 12.A - Prob. 7QECh. 12 - Prob. 1QECh. 12 - Prob. 2QECh. 12 - Prob. 3QECh. 12 - Prob. 4QECh. 12 - Prob. 5QECh. 12 - Prob. 6QECh. 12 - Prob. 7QECh. 12 - Prob. 8QECh. 12 - Prob. 9QECh. 12 - Prob. 10QECh. 12 - Prob. 11QECh. 12 - Prob. 12QECh. 12 - Prob. 13QECh. 12 - Prob. 14QECh. 12 - Prob. 15QECh. 12 - Prob. 16QECh. 12 - Prob. 17QECh. 12 - Prob. 1QAPCh. 12 - Prob. 2QAPCh. 12 - Prob. 3QAPCh. 12 - Prob. 4QAPCh. 12 - Prob. 5QAPCh. 12 - Prob. 1IPCh. 12 - Prob. 2IPCh. 12 - Prob. 3IPCh. 12 - Prob. 4IPCh. 12 - Prob. 5IPCh. 12 - Prob. 6IP
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