isi prep

[SHIKHA]

A firm has two plants and produces a single output using two inputs. if plant 1 operates at level x1 it produces x1 units of output and utilizes 5 x1 units of input1 and 2 x1 of input2. if plant 2 operates at level x2 it produces x2 units of output  and utilizes 3 x2 units of input1 and 2 x2 of input2.let y1 and y2 be level of input 1 & 2 respectively.
depict the set of inputs(y1 ,y2) that yields an o/p of 1unit..plz tell kaise banega isoquant of 1unit???

[n.saish]

F1= min{a1/5,b1/2}
F2= min{a2/3,b2/2}

So a1=5*F1
    a2 =3*F2
a1+a2=y1=5F1+3F2-----1.
Similarly b1+b2= y2= 2F1+2F2----2.

For isoquant of 1 unit: F1+F2=1-----3.
Substituting 1,2 in 3 in terms of y1,y2 you will get the equation of the isoquant.
I'm getting y2=2 as the final answer... May be I'm making some calculation error... Tell me what answer you get...

[Hargun]

ummm firstly are we assuming zero substitutability between inputs or is it given. also isn't plant two straight-away more efficient than the first? it requires 3,2 for one unit while first requires 5,2. if so, then the second plant's isoquant should be the firm's isoquant. then min[y1/3,y2/2] is the answer (assuming no substitutability, of course).. Is this correct?

[deepak]

Got the same answer.

[SHIKHA]

i dnt think so dr is zero substitution...ok tell wht will happen in dis case with substitution possible

[Hargun]

actually now i think about it, the question does specify zero substitutability cuz there is fixed proportions of inputs. so our answer is valid.

[anon_econ]

is the isoquant the line representing y2=2 or the line representing y2=2, 3=<y1=<5?

[Amit Goyal]

I am posting a similar problem with the answer. Now try the one you posted.
1.png

[anon_econ]

I'm not sure I understand. Can u plz help, sir?
We have 4x1+3x2=z1 and 2x1+4x2=z2. By putting x1+x2=1 i ultimately got 2z1+z2=10. also, if production takes place in both plants, 3<z1<4 and 2<z2<4. so v get the diagonal line. the end points correspond to the points at which all production takes place in only 1 plant. what next?

[anurag]

thnx vasudha , fr d most awaited answer B)

[anon_econ]

what? i'm not providing any answer. i am CONFUSED!

[Hargun]

there is no further answer, you've derived the isoquant.. :).. the portions of the isoquant parellel to axes are where only one plant produces, the slanting line is where both produce. on the slanting portion, plant one produces z1/4 units of output and the other plant produces z2/4 units of output. am i right?

[anon_econ]

umm, how do u do shikha's question?

[SHIKHA]

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[anon_econ]

i think i'm the only one who's still not getting it :P
thanks. i'll try 2 figure it out.

[Hargun]

will it help if i try to explain it grphically? i did both questions through graphs..

[anon_econ]

yes hargun, plz do :)

On Thu, Jul 5, 2012 at 11:32 PM, Hargun [via Discussion forum] <[hidden email]> wrote:

will it help if i try to explain it grphically? i did both questions through graphs..

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[SHIKHA]

what part u nt getting...
hey in some earlier posts u said ur friend gave interview in kolkatta..can u share her experience...is the pattern same..or wat all dey asked..n the ques given to do on board was frm which topic..

[anon_econ]

i didnt ask her what they asked :P
all i know is what i already posted there. i hv a friend who's giving it tomorrow; i'll ask him n post it here :)

[SHIKHA]

actually i dnt remember wat u wrote i tried to locate dt thread.bt couldnt find..can u write it again..