Question

Suppose the production function is given by formula Q = KL.

A) Draw the isoquant curve for Q = 128. (Draw K on the vertical axis and L on the horizontal axis.)

B) Suppose K = 4. How many units of labor should the firm use if it wants to produce 128 units of output? Label it point X on the isoquant curve.

C) Suppose K = 8.How many units of labor should the firm use if it wants to produce 128 units of output? Label it point Y on the isoquant curve.

D) What is the marginal rate of technical substitution between points X and Y? Explain.

Answer #1

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(a) Calculate the slope of isoquant curve.
(b) Calculate the slope of isocost curve.
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Draw isoquant curve for the following production functions.
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In the graph, let ?Kbe on the vertical axis and ?Lbe on the
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(2) ?¯=200,Q¯=200,
(3) ?¯=300.Q¯=300.
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(2) ?¯=200,Q¯=200,
(3) ?¯=300.Q¯=300.
This production function is an example of perfect substitutes
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