Exam 7: Appendix: a Closer Look at Production and Cost

If W equals the price of labor and R equals the price of capital, then at the optimal input combination, the marginal rate of technical substitution equals

Upon opening a printing and copy shop, a firm budgets $40,000 for copy machines and labor. The firm can operate its copy machine for 2,000 hours if it doesn't hire any labor. What is the hourly wage the firm must pay?

A firm that maximizes output for a given total cost must be producing where the isocost line is

Technological efficiency means that

Exhibit 7-18 -In Exhibit 7-18, the rotation from AC to AB reflects a(n)

Exhibit 7-16 -Which combination of capital and labor illustrated in Exhibit 7-16 will be the least costly?

The horizontal (labor) intercept of Manny Motors' isocost line is 3 million, and the vertical (robot) intercept is 5 million. Which of the following best describes what would happen to the isocost line if the price of robot hours increased?

Upon opening a printing and copy shop, a firm budgets $30,000 for copy machines and labor. The firm can operate its copy machine for 2,000 hours if it buys no labor. What is the vertical intercept of the isocost line when labor is measured on the horizontal axis?

Exhibit 7-21 -If the isocost line in Exhibit 7-21 is AB, the firm's optimal combination of inputs is shown at point

All combinations of inputs along an isoquant line represent the same profit.

Exhibit 7-19 -In Exhibit 7-19, the rotation from AB to AC reflects a(n)

The slope of an isocost line equals the absolute value of the input prices ratio.

A change in the slope of the isocost line indicates a change in the price of one of the inputs.

Exhibit 7-20 -In Exhibit 7-20, the movement from AB to CD might reflect a(n)

-Which of the following points in Exhibit 7-17 represent capital-labor combinations that cost the firm the same amount?

Two graphs that represent alternative ways of portraying costs in the long run, given resources and technology, are

Exhibit 7-22 -In Exhibit 7-22, which input combination shows the minimum cost of producing output Q₁?

Manny Motors, Inc., can hire auto workers for $20 per hour, whereas robot arms cost $12 per hour to operate. The horizontal (labor) intercept of the isocost line is 3 million, and the vertical (robot) intercept is 5 million. If Manny Motors' operating budget became $120 million, the horizontal intercept would become