1. Assume that the typical firm in market A hires two variable factors, skilled and unskilled labor, and a fixed amount of capital.
a. Use isoquant/isocost analysis to show how the minimum wage affects a typical firm's hiring decision.
b. Use isoquant/isocost analysis to show how the minimum wage affects the skilled labor-unskilled labor ratio for this firm
2. Firm A is considering expansion (increase in scale). How would you describe their expansion with isoquants if the firm is starting to exhaust their economies of scale?
3. Use isoquant/isocost analysis to explain/show how a capital-saving innovation might affect a firm's capital-labor ratio.