Change in the law is equivalent to a change in technology

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Reference no: EM13837158

You are tasked with manufacturing 12 commercial aircraft per month. A new OSHA rule requires that welders be given paid 2 hour break for every 2 hours of work to prevent carpel tunnel syndrome. Using the isoquant isocost graph as an aid, explain what will happen to the capital-labor ratio (K/L) in both the short run (when capital is fixed) and the long run (when capital can change). Illustrate your answer using the isoquant/isocost diagram. (Hint: The change in the law is equivalent to a change in technology.)

Reference no: EM13837158

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