9781118041581

$13,900 $13,600 $300. Labor’s shadow price becomes zero when the

supply of labor increases to 40 hours per week. At this level, the labor

constraint line lies (just) outside the land constraint line.

4. Producing 1,000 bushels of soybeans has an opportunity cost of

.

The direct revenue from selling the 1,000 bushels is $1,750. Since this

revenue falls short of the cost, soybeans (in this or any other amount)

should not be grown.

5. a. School 1’s shadow price:The extra spot in school 1 will be filled by a west
   student who was attending school 2. This saves .6 kid-mile, because
   school 1 is this much closer to the west neighborhood than is school 2.
   In turn, the freed space in school 2 is filled by a south student (who
   was attending school 3) for a .2 kid-mile savings. The total gain in kid-
   miles is .6  .2  .8.
   b.West neighborhood’s shadow price:The extra west student attends school 2
   (an extra 2.0 kid-miles), displacing a south student who now moves to
   school 3 (an extra .2 kid-mile). Thus, the total increase in kid-miles is 2.2.

(2)($400)(4)($300)$2,000

750 Chapter 17 Linear Programming

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