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1.If the shadow price for month 2 is $125 per labour hour, which of the following statements is/are correct?
(1) The production manager would be willing to pay existing staff a maximum overtime premium of $125 per hour for the next 2,000 hours
(2) The production manager would be willing to pay a maximum of $170 per hour for an additional 2,000 hours of temporary staff time
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
2.Which of the following interpretations of the linear programming graph produced for month 3 is/are correct?
(1) All other things being equal, unless demand increases for either product labour will be a slack variable
(2) If more machine hours were made available in month 3, they would be used initially to make Herdorfs
A 1 only
B 2 only
C Both 1 and 2
D Neither 1 nor 2
