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You are the CEO of large scale corporate farms and your You are the CEO of large-scale
corporate farms, and your managers run two farms in neighboring counties. Your chief financial
officer reports that in both Rice and Reno counties, farm labor can be hired for $7.36 per hour,
farm […]
Baldor Inc measures the marginal rate of technical substitution MRTS Baldor, Inc. measures the
marginal rate of technical substitution (MRTS) at M P L /M P K = 3. The prices of labor and
capital faced by Baldor are such that currently W/R = 4. a. Is Baldor minimizing its […]
Use a diagram to explain the following In the case Use a diagram to explain the following: In the
case of perfect substitutes, if the ratio of input prices equals the MRTS, will a unique solution to
the firm’s cost-minimization problem exist? In the case of perfect substitutes, if the […]
Suppose that Maureen believes that name brand laundry detergent is twice Suppose that
Maureen believes that name-brand laundry detergent is twice as effective as generic laundry
detergent but that the two goods are otherwise identical. Therefore, her utility function is U(X,Y)
= X + 2Y, where X is ounces of […]
Indicate whether the following statements are true false or uncertain Indicate whether the
following statements are true, false, or uncertain. If false or uncertain, explain why. a. The price
of a watch increases by 10%, and you spend a larger fraction of your income on it. The watch is
a […]
Kim s utility function is given by U 5X Kim’s utility function is given by U = 5X + 2Y, where MUX
= 5 and MUY = 2. a. Suppose that at the prices PX and PY of good X and good Y, respectively,
Kim is consuming (optimally) some positive […]
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