Answer:
C. optimal capital labor ratio remains the same
Explanation:
One pilot for each plane implies A = B
Let cost be C
So, isocost line is xA + rB = C
So, xA + yA = C (as L = K)
So, (x+y)A = C
So, A = C/(x+y) =B
Optimal capital labor ratio = B/A = 1 as B =A
Now, wage rate increases to x'
So, isocost line is x'A + yB = C
So, x'A + yA = C (as A = B)
So, (x'+y)A = C
So, A = C/(x'+y) = B
New optimal capital labor ratio =B/A = 1 as B = A
Thus, optimal capital labor ratio remains same because capital (planes) and labor (pilots) are used in fixed proportion.
Thus the answer is
C. optimal capital labor ratio remains the same
Answer:
Explanation:
Total cost of repairs:
Material = 3,500
Material loading charge = 3,500 * 65% = 2,275
Labor (45hrs* $47per hr) = 2,115
Thus, total cost =(3500 + 2275 + 2115) = $7,890
