Answer to Question #93967 in Microeconomics for Tracie Moore

Question

Technology B uses 4 workers and 2 tonnes of coal to produce 100 meters of cloth. The worker's wages cost $10 and coal costs $5. We have previously calculated that the total cost of production is $50 and that the vertical intercept of the isocost line is 10.Technology B uses 4 workers and 2 tonnes of coal to produce 100 meters of cloth. If there was a technology that used 1 more worker, how much would it have to decrease the coal required in order to cost the same? (Note: this is the absolute value of the slope of the isocost line.)

Answer 1

If there was a technology that used 1 more worker, then it would have to decrease the coal required by 2 tonnes in order to cost the same.