Answer to Question #294975 in Microeconomics for Ysabelle

Question

A farmer has a capital of P2,500 for his crop production. Labor cost P240.00 per day and fertilizer cost P360.00 per bag. What would be the combination of the two resources to minimize costs? If the money will be spend on labor, how many days will his budget last to pay labor? How many bags of fertilizer can he produce? Determine the total no. of laborers can the farmer employ. Show your solution. Illustrate the isoquant curve and the isocost line of the mentioned items.

Answer 1

240x+360y=2500

y=7

x=11

11 days will his budget last to pay labor

 7 bags of fertilizer can he produce