Dominick Salvatore Schaums Outline of Microeconomics, 4th edition Schaums Outline Series 2006

CHAP. 6] THEORY OF PRODUCTION 135
(c)
When the amount of land is kept fixed at 2 units rather than 1 unit, all the curves shift up (the solid curves as
compared to the corresponding dashed ones). This is generally the case (in stage II) and results because each
unit of the variable factor has more of the fixed factor to work with. Note that the horizontal axes in Fig. 6-15
refer to the number of units of labor used per unit of time on 2 units of land for the solid lines and on 1 unit of
land for the dashed lines.
PRODUCTION WITH TWO VARIABLE INPUTS
6.12 Table 6.12 gives points on four different isoquants. (a) Find the MRTS LK between successive points
within the relevant range of each isoquant. (b) Plot the four isoquants on the same set of axes and
draw in the ridge lines.
Table 6.12
I II III IV
L K L K L K L K
3 14 4 14 5.5 15 8 16
2 10 3 11 5 12 7 12.5
3 6 4 8 5.5 9 8 9
4 4.5 5 6.3 6 8.3 9 7
5 3.5 6 5 7 7 10 6.4
6 3 7 4.4 8 6 11 7
7 2.7 8 4 9 5.6
8 3 9 4.4 10 6
(a)
Table 6.13
I II III IV
L K MRTS LK L K MRTS LK L K MRTS LK L K MRTS LK
3 14 4 14 5.5 15 8 16
2 10 3 11 5 12 7 12.5
3 6 4.0 4 8 3.0 5.5 9 6.0 8 9 3.5
4 4.5 1.5 5 6.3 1.7 6 8.3 1.4 9 7 2.0
5 3.5 1.0 6 5 1.3 7 7 1.3 10 6.4 0.6
6 3 0.5 7 4.4 0.6 8 6 1.0 11 7
7 2.7 0.3 8 4 0.4 9 5.6 0.4
8 3 9 4.4 10 6
The MRTS LK ¼ DK=DL. The relevant range of isoquants is that where corresponding quantities of labor and
capital move in opposite directions. These correspond to the negatively sloped portions of isoquants.