Overview
You are the manager of the toll both at the Hartsfield Jackson International Airport. You hire between 1 and 5 toll booth attendants during any given work week depending on the workload for that week. You also employ between 1 and 5 automated toll machines during any given work week depending on the workload for that week. You have compiled the number of airport toll booth users processed (i.e. weekly output) based on the various combinations of toll booth workers and automated toll machines employed as shown below.
Labor Input
Capital Investment 1 2 3 4 5
1 35 60 70 85 95
2 60 70 85 95 105
3 70 85 95 105 115
4 85 95 105 115 125
5 95 105 115 125 135
a. Plot the isoquants corresponding to the following output levels: 70, 95, and 115. Upload your isoquant map using the attachment tool.
b. What can be said about the Marginal Rate of Technical Substitution of each of these isoquants? Show complete working when deriving your answer.
c. What type of returns to scale does the production function exhibit when inputs are doubled from 1 to 2? and then from 2 to 4? Show complete working when deriving your answer.