what is 44 and 45? are a manufacturer that produces small utility tractors and l
ID: 1104365 • Letter: W
Question
what is 44 and 45?
are a manufacturer that produces small utility tractors and lawn mowers The table below shows level of inputs available some of the different combinations of outputs you can produce using the given at your factory. Your price per Lawnmower is $3000 per unit and your price per Tractor is $75,000 per unit. Complete the table to answer questions 42-45 MRPS Tractors (Y Lawnmowers (Y2) 200 25000 300 24000 10 22500 200001 35 170000 400 500 600 700 13000 40 42. What is the equation to find MRPS? 43 All of the output combinations shown above are on the same A Production Possibilities Frontier _ Isoquant Indifference Curve lsocost Line C 44 What is the numerical value of the slope of the Isorevenue line? 45. What is the profit-maximizing output combination?Explanation / Answer
ans 44 . the slope of isorevenue line is MRTS ie marginal rate of technical substitution.
For determining the combination of two products, produced by using a given amount of an input as will ensure the maximum revenue, we need another tool of analysis.
This is called an iso-revenue line. Just as a production possibility curve indicates various combinations of two products that can be produced by using the same amount of the variable input (x1), an iso-revenue line shows all possible combinations of two products which would yield the same total revenue.
An iso-revenue line for any total revenue can be easily draw by determining the extreme points on the axes of coordinates and connecting these points with a straight line. the pint on Y-axis is determined by the value TR/PY1 and that on the X-axis is determined by the value TR/ PY2. These points, in other words, show the amount of Y1 and Y2 respectively, needed to earn the given level of total revenue.
ans 45
The profit maximizing combination of two products
is found where the slope of the production possibilities
frontier (PPF) is equal to the slope of the iso-revenue
Curve
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