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Isoquant and isocost curves

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The following production table provides estimates of the maximum amounts of output possible with different combinations of two input factors, X and Y. (Assume these are just illustrative points on a spectrum of continuous input combinations.)
Units of Y
Used Estimated Output per Day
5 184 265 334 395 440
4 176 248 303 352 395
3 164 216 264 303 334
2 128 176 216 248 265
1 88 128 164 176 184
1 2 3 4 5
Units of X Used
a. List the different combinations of inputs X and Y that, if graphed, would illustrate an isoquant for an output of 176.
b. Assuming that output sells for $3 per unit and X is fixed at 4 units, complete the following table:

Units of Y employed Total Product (Output) Marginal Product (Output) Value Marginal Product of Y
1 176 176
2
3 55
4 49 147
5 395 129
c. Assuming still that X is fixed at 4 units, the output of the production process sells for $3, and the cost of Y is $135 per day, how many units of Y will be employed? Explain how you reached your answer.
d. Suppose that the cost of units of both input X and input Y are the same at $135 per day. Describe how isocost curves for a cost of $135 and also for a cost of $270 would look. How would you describe both the shape and slope of the isocost curves?

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Solution Summary

Isoquant Isocost curves constructed from the prices of inputs and outputs.

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