Is acme currently employing the optimal amount of capital

Assignment Help Econometrics

Reference no: EM13188347

Acme Container Company produces egg containers that are sold to egg distributors using capital and labor. At Acme the marginal product of labor is: MPL=15 while the marginal product of capital is: MPK=10. Workers at Acme earn $10 hour (w=$10), while Acme's capital rents for $20/hour (r=$20). Is Acme currently employing the optimal amount of capital and labor? If not, what do they need to change so that they are employing the optimal amount of the two inputs?

Reference no: EM13188347

Questions Cloud

State volumetric flask and diluted to the mark : A 25.00 mL sample of a sodium hypoclorite liquid bleach is placed in a 250 mL volumetric flask and diluted to the mark. A 25.00 mL aliquot of this solution is placed in a 250 mL Erlenmeyer flask.

Estimate the purchase price for the new boiler : The purchase price of a natural gas- fired commercial boiler (capacity X) was $181,000 eight years ago. Another boiler of the same basic design, except with capacity 1.42X, is currently being considered for purchase. If it is purchased, some optio..

State water tank in order to obtain a solution that freezes : How much antifreeze would you add to a 2.0 gal water tank in order to obtain a solution that freezes

How to develope a cost and revenue structure for designing : You are planning to build a new home with approximately 2,000-2,500 gross square feet living space on one floor. In addition, you are planning an attached two car garage (storage space) of approximately 450 gross square feet.

Is acme currently employing the optimal amount of capital : Acme Container Company produces egg containers that are sold to egg distributors using capital and labor. At Acme the marginal product of labor is: MPL=15 while the marginal product of capital is: MPK=10. Workers at Acme earn $10 hour (w=$10), whi..

What is fedexs strategy for success : Assume that the senior managers of FedEx Express and FedEx Ground each have an investment opportunity that would require $20 million of additional operating assets and that would increase operating income by $4 million. If FedEx evaluates all of i..

Calculate the p-value and interpret the result : Could the statement in the brochure be substantiated on the basis of these findings? Test with .05 significance level. Also calculate the P-value and interpret the result.

Why consumer surplus arises in a market : People enjoy outdoor holiday lighting displays, and would be willing to pay to see these displays, but can't be made to pay. Because those who put up lights are unable to charge others to view them, they don't put up as many lights as people would..

What should the lengths of the sides of the rectangular : farmer wants to fence an area of 13.5 million square feet in a rectangular field and then divide it in half with a fence parallel to one of the sides of the rectangle. What should the lengths of the sides of the rectangular field be so as to minim..

User Account

All Pages