Assignment:
1.NEW DELHI -- Each fall at harvest time, Leela Dhar Rajput used to hire 25 farm hands to work from dawn to dusk every day for a week bringing in the rice crop on his 20 acres of land in the central Indian state of Madhya Pradesh. This year, he plans to use a combine harvester instead. With the machine and the help of two or three men, he expects to finish the job in a single day. Indian agriculture is belatedly engaged in a mechanical revolution, boosting productivity in a sector that has long relied on cheap, surplus labor to tend crops in the world's second most populous country. Job opportunities in factories and services, plus the government's rural job-creation program guaranteeing 100 days of employment a year on public-works projects, have drained the pool of workers in villages. "I just can't find enough people to do the hard work in the fields anymore," says Mr. Rajput. [Mukherji, B. (2013, October 29). India's Farmers Mechanize. WSJ, B8.]
Show and label the amount of capital (K) and labor (L) employed with the displayed isocost line and then insert a new isocost reflecting a substantial increase in the price of labor. Mr. Rajput intends to harvest the same quantity of rice as last year. Show and explain the effect on the K and L employed.
2.Complete the table (the easiest method is to do the computation in MS Excel). Create a line graph of AFC, AVC, ATC, and MC (in Excel, select the 4 columns, then Insert/Line, and choose the first graph option). Explain the reason for the shape of each curve. The completed table and graph can be copied and pasted into this document. Hint: Be certain that your line graph looks similar to those in Baye (your graph will not be as smooth as in Baye). If not, there is likely an error in your computations.
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Q
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FC
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VC
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TC
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AFC
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AVC
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ATC
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MC
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0
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$10,000
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100
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$200
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200
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125
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300
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133.34
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400
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150
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500
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200
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600
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250
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