Q. Appalachian Coal Mining should minimize net cost by choosing that level of pollution (P) where the marginal benefit of pollution reduction equals the marginal cost of pollution reduction:
• 1,000 - 10P = 40P
• P* = 20 units of pollution.
Q. The production function for Spicily Sprockets is K represents the number of robot hours utilized in the production process while L represents the number of labor hours. Create a table of different combinations of K also L that will produce 10 units of output. Using the information in this table, sketch the isoquant for 10 units of output.