92%(90)83 out of 90 people found this document helpful
This preview shows page 8 - 10 out of 12 pages.
e. Suppose that installing and maintaining an ATM costs $20, and hiring a teller costs $32. What will happen to Gloucester’s total number of customers served if it lays off 2 workers and installs 3 ATMs? What will happen to the bank’s costs?f. Using the idea developed in (e), if Gloucester Old Bank is interested in minimizing its costs, what strat-egy should it employ regarding its input mix?L$413. Baldor, Inc. measures the marginal rate of technical substitution (MRTS) at MP L/M P K= 3. The prices of labor and capital faced by Baldor are such that currently W/R= 4.a. Is Baldor minimizing its costs?b. What can Baldor do to improve its situation?MP r_Goolsbee1e_Solutions_Manual_Ch06.indd 70Goolsbee1e_Solutions_Manual_Ch06.indd 7011/15/12 3:08 PM11/15/12 3:08 PM