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The Ontario Brassworks produces brass cups. As you know, brass is an alloy of copper and zinc, used in fixed proportions.
6. The Ontario Brassworks produces brass cups. As you know, brass is an alloy of copper and
zinc, used in fixed proportions. The production function is f(x1; x2) = minfx1; 2x2g, where x1
is the amount of copper, and x2 is the amount of zinc. The prices are p = 5;w1 = 2; and w2 = 3.
(a) Draw on a graph some typical isoquants for this production function.
(b) Does this production function exhibit increasing, decreasing, or constant returns to scale?
(c) What is the cheapest way to produce 2 brass cups? What is the total cost?
What is the cheapest way to produce y brass cups? What is the total cost?
(d) What is the profit-maximizing production plan? Explain your answer.
