Which nation should the company locate its new plant

Assignment Help Business Economics

Reference no: EM1346272

As head of the planning commission of Eastern Motors, your job is to determine where to locate a new plant. The only inputs used in your cars are steel and labor and the production function is Cobb-Douglas where f (S, L) = S.5L.5, where S is tons of steel and L is units of labor. You can locate your plant either in country A or country B. In country A, steel costs $7 a ton and labor costs $7 per unit. In country B, steel costs $8 per ton and labor costs $6 per unit. In which nation should the company locate its new plant so as to minimize costs per unit of output?

Reference no: EM1346272

Questions Cloud

Analyze your communication skills : Analyze your communication skills and what assessment did you use to analyze your skills? Do you have communication gaps?

Elucidate which is more cost-effective : Elucidate which is more cost-effective. If the salary rate increased to $12 an hour, which would be more cost-effective.

Virtual communication and your own abilities for future : Examine your experience in working with your team for the Team Project on Leadership - what lessons you have learned about virtual communication and your own abilities for future team participation.

What cause an increase in producer surplus : Among which of the following will cause an increase in producer surplus. Which of the following causes a shortage of a good.

Which nation should the company locate its new plant : which nation should the company locate its new plant so as to minimize costs per unit of output.

Define earnings management : Discuss the concept of earnings management connotes different things to different users of the term. Define and explain earnings management.

What is the world price of a ton of coffee : Explain how many tons of coffee does the United States import. If the world price of a computer is $500, what is the world price of a ton of coffee.

Explain markets expectations about future of economy : Finish the given assignment by entering the data in a M.S. excel spreadsheet & using graphing capabilities in Excel to create the yield curve.

Elucidate the fact that the cross-price elasticity : Elucidate the fact that the cross-price elasticity of natural gas with respect to the price of fuel oil.

User Account

All Pages