Question:
The Ontario Brassworks produces brazen e ronteries. As you know brass is an alloy of copper and zinc, used in xed proportions. The production function is given by: f(x1; x2) = minfx1; 2x2g, where x1 is the amount of copper it uses and x2 is the amount of zinc that it uses in production.
(a) Illustrate a typical isoquant for this production function in a graph.
(b) Does this production function exhibit increasing, decreasing or constant returns to scale?
(c) If the rm wanted to produce 10 e ronteries, how much copper would it need? How much zinc would it need?
(d) If the rm faces factor prices (1, 1) what is the cheapest way for it to produce 10 e ronteries? How much will this cost?
(e) If the rm faces factor prices (w1;w2), what is the cheapest cost to produce 10 e ronteries?
(f) If the rm faces factor prices (w1;w2), what will be the minimal cost of producing y effronteries?