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Economics 11th Edition by William McEachern
Edition 11ISBN: 978-1305505469Economics 11th Edition by William McEachern
Edition 11ISBN: 978-1305505469 Exercise 21
CHOICE OF INPUT COMBINATIONS Suppose that a firm's cost per unit of labor is $100 per day and its cost per unit of capital is $400 per day.
a. Draw the isocost line for a total cost per day of $2,000. Label the axes.
b. If the firm is producing efficiently, what is the marginal rate of technical substitution between labor and capital?
c. Demonstrate your answer to part (b) using isocost lines and isoquant curves.
a. Draw the isocost line for a total cost per day of $2,000. Label the axes.
b. If the firm is producing efficiently, what is the marginal rate of technical substitution between labor and capital?
c. Demonstrate your answer to part (b) using isocost lines and isoquant curves.
Explanation
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Isocost Line
Isocost line refers to the...
Economics 11th Edition by William McEachern
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