Answer to Question #259548 in Microeconomics for wta

Question

a.   Assume capital is K = 6, how much labor will be required to produce 60 cans of tuna? How much labor will be required to produce 100 cans of tuna?

b.   Now, assume capital is K = 8, how much labor will be required to produce 60 cans of tuna? How much labor will be required to produce 100 cans of tuna?

c.    Graph the isoquants for Q = 60 and Q = 100. What is the MRTS along the isoquants?

Answer 1

Solution

1) a. The production function is given as:

q = 6K + 4L

If capital is fixed at 6 and the quantity of tuna cans is equal to 60, then the labor input required is equal to 6 which can be calculated as:

60 = 6 x 6 + 4 x L

24 = 4L

L= 6

If capital is fixed at 6 and the quantity of tuna cans is equal to 100, then the labor input required is equal to 16

which can be calculated as:

64L = 4L

L= 16

b. If capital is fixed at 8 and the quantity of tuna cans is equal to 60, then the labor input required is equal to 3 which can be calculated as:

60 = 6 x 8 + 4 x L

4L = 12

L= 3

Similarly, If capital is fixed at 8 and the quantity of tuna cans is equal to 100, then the labor input required is equal to 13.

C.