A company that produces brass hardware for doors has the ability to produce up to 6,500 hinges per week but then is unable toproduce doorknobs. Or it can produce up to 650 doorknobs per week but then is unable to produce any hinges.In the graph below, use the straight-line tool to draw the company's production possibilities frontier, where the quantities are per week(do not use the point tool to plot endpoints). Then use the point tool to plot a point to indicate the company's maximum output where itis producing exactly three times as many hinges as doorknobs.To refer to the graphing tutorial for this question type, please click here.Quartity ofinge000750000040000001001000Quartity of doorknot

Given That a company that produces brass hardware for doors has the ability to produce up to 6,500…

Answered: A company that produces brass hardware…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.1P

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In recent years, the United States has experienced large increases in oil production due in large part to a new technology, hydraulic fracturing ("fracking"). Fracking involves injecting a mixture of water, sand, and chemicals into rock formations at high pressure to release oil and natural gas. An article in the Wall Street Journal indicates that economies of scale in fracking may be considerably smaller than in conventional oil drilling. If this view is cor- rect, what would the likely consequences be for the num- ber of firms drilling for oil in the United States?
A firm has the production function f(X, Y) = x²/2 y1/2, where X is the amount of factor x used and Y is the amount of factor y used. On a diagram we put X on the horizontal axis and Y on the vertical axis. We draw some isoquants. Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of -3. The straight line we drew Select one: O a. is vertical. b. is horizontal. c. is a ray through the origin with slope 3. d. is a ray through the origin with slope 4. O e. has a negative slope.
***There are FOUR parts to the question, all based around the same given data...please answer and explain each and note where graphs are needed*** Given: A farmer raises apples using land (K) and labor (L), and has an output of ?(?,?)= ?0.5?0.5 bushels of apples. a. Find several input combinations that give the farmer 6 bushels of apples. Sketch the associated isoquant on a graph, with L on the x-axis and K on the y-axis. b. In the short run, the farmer only has 4 units of land. What is his short-run production function? Graph it for values of L from 0 to 16, with L on the x-axis and output on the y-axis. What is the name of the slope of this curve? c. Assuming the farmer still only has 4 units of land, how much extra output does he get from adding 1 extra unit of labor if he is already using only 1 unit of labor? How much extra output does he get from adding 1 extra unit of labor if he is already using 4 units of labor? d. In the long run, the farmer can change both his…
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Explain two reasons due to which economies of scale may arise. Write your answer within 40 words. You are not required to draw any diagrams
Explain the difference between economies of scale and economies of scope with an example. Please give the answer thoroughly.
Brian uses wool (K) and labour (L) to produce t-shirts (q). The production function is: q = min{1/3L, 2K}. The inputs are perfect complement.If he uses 0.5 kg of wool and 3 hours of labour, he can produce 1 t-shirt. Draw isoquants for q = 1, q = 2 and q = 3 on a diagram with labour on horizontal axisand wool on vertical axis.
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Microeconomics - Production FunctionFind the returns to scale of the following production functions:F(K,L) = K1/2 * L1/2F(K,L) = A* K3/4 * L1/2F(K,L) = 3K + 2L
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***QUESTION HAS FOUR PARTS - ALL PARTS MUST BE ANSWERED TOGETHER AS THEY ARE DEPENDENT ON EACH OTHER*** 1. A farmer raises apples using land (K) and labor (L), and has an output of ? (?,?) = ? 0.5 ? 0.5 bushels of apples. a. Find several input combinations that give the farmer 6 bushels of apples. Sketch the associated isoquant on a graph, with L on the x-axis and K on the y-axis. b. In the short run, the farmer only has 4 units of land. What is his short-run production function? Graph it for values of L from 0 to 16, with L on the x-axis and output on the y-axis. What is the name of the slope of this curve? c. Assuming the farmer still only has 4 units of land, how much extra output does he get from adding 1 extra unit of labor if he is already using only 1 unit of labor? How much extra output does he get from adding 1 extra unit of labor if he is already using 4 units of labor? d. In the long run, the farmer can change both his amount of land and his amount of labor. Suppose…

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