possible answers a. 2.5, 4, 0, 8, 14, 9, 7 b. long run, short run AND 7,8,3,2.5,
ID: 1099550 • Letter: P
Question
possible answers
a. 2.5, 4, 0, 8, 14, 9, 7
b. long run, short run AND 7,8,3,2.5,4,9,0 AND short run, long run AND 2.5,7,4,3,0,8,9 AND 3,0,7,4,8,9,2.5 AND exactly the same as, less than, more than
Happy Nails is a nail salon that sells manicures (output). To give (produce) manicures, Happy Nails needs workers to apply the nail polish (labor) and manicure machines that massage the hands and soften the nails and cuticles (capital). While hours of labor used can be changed daily, the manicure machines are rented out for a period of one year. Once they rent a machine, Happy Nails must pay rent for one year. Only after the year is over can the machine can be returned. In the graph above, the orange lines (marked C = $280 and C = $160) represent Happy Nails' isocost curves for total costs of $280 and $160. The blue curve (marked Q = 20) and green curve (marked Q = 35) represent Happy Nails' isoquants for 20 and 35 manicures sold, respectively. The red points (cross symbols) are placed at the tangency points of the isocost and isoquant curves. Finally, the purple point (diamond symbol) is placed at the point (2.5.7), or 2.5 hours of labor (L = 2.5 hours) and 7 manicure machines (K = 7 machines). Currently, Happy Nails sells 35 manicures per day. The manager decides to rent seven machines. Therefore, the manager must use Select... hours of labor per day to be able to produce exactly 35 manicures per day. Unexpectedly, the country in which Happy Nails operates hits hard economic times. As a result, people cut back spending on frills such as manicures. Demand for Happy Nails manicures drops to 20 manicures per day. But Happy Nails has already rented seven manicure machines for a year. In the Select... when the quantity of machines is fixed at seven, Happy Nails will choose to use Select- hours of labor to produce 20 manicures per day. In the Select... when the quantity of manicure machines is once again variable, Happy Nails will choose to use Select... manicure machines and Select... hours of labor per day in order to produce 20 manicures per day. This means that Happy Nails will spend it did when the quantity of machines was fixed at seven. Therefore, its total cost Select... will be lower after its quantity of capital is once again variable.Explanation / Answer
a. 7
b. short run AND 2.5 AND long run AND 4 AND 4 AND less than
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