question archive A widget manufacturer faces a fixed proportion production function such that two workers using one machine can produce 50 widgets
A widget manufacturer faces a fixed proportion production function such that two workers using one machine can produce 50 widgets
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A widget manufacturer faces a fixed proportion production function such that two workers using one machine can produce 50 widgets. If you were to graph the isoquants for q=50, q=100 and q=150, you would see that, regardless of input prices, the expansion path would be:
a.The vertical axis
b.A straight line connecting the points where L=2K
c.The horizontal axis
d.A straight line connecting the points where K=2L
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d. A straight line connecting the points where K=2L
Step-by-step explanation
The Production given is:
q=2L+K
Here such combination produces output 50 so q=50=2L+K
Now if we increase the output by a proportion then the slope of this line will remain same.
q=2L+K = 50
2q =4L+2K=100
3q = 6L+3K=150
the slope is same in this case of substituting production function.
the capital and labor is used in the same proportion so: K=2L
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expansion path will be a straight line connecting the points where K=2L
