Consider the following production function q = 5KL² - 0.5(KL³) 3.1 Considering capital fixed to a value of 2, in the short run, write down and show on a graph the total product function. Indicate in that graph what is the highest value of L for which this function can be considered a production function. 3.2 Write down and show in a graph, the marginal product of labor and the average product of labor. Calculate the point where they cross. Calculate the point where Average product of labor is maximized. Above which value of L, does the function show decreasing marginal returns to labor? 3.3 How does the figures representing Marginal and average product change, if capital K is doubled to the value of 4 (and still fixed). Are the marginal and average product of labor different? Draw the new figure. Is the value of L that maximizes the average product of labor changed?
Consider the following production function q = 5KL² - 0.5(KL³) 3.1 Considering capital fixed to a value of 2, in the short run, write down and show on a graph the total product function. Indicate in that graph what is the highest value of L for which this function can be considered a production function. 3.2 Write down and show in a graph, the marginal product of labor and the average product of labor. Calculate the point where they cross. Calculate the point where Average product of labor is maximized. Above which value of L, does the function show decreasing marginal returns to labor? 3.3 How does the figures representing Marginal and average product change, if capital K is doubled to the value of 4 (and still fixed). Are the marginal and average product of labor different? Draw the new figure. Is the value of L that maximizes the average product of labor changed?
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
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Transcribed Image Text:Consider the following production function q = 5KL² - 0.5(KL³)
3.1
Considering capital fixed to a value of 2, in the short run, write down and show on a graph
the total product function. Indicate in that graph what is the highest value of L for which this
function can be considered a production function.
3.2 Write down and show in a graph, the marginal product of labor and the average product
of labor. Calculate the point where they cross. Calculate the point where Average product of
labor is maximized. Above which value of L, does the function show decreasing marginal returns
to labor?
3.3 How does the figures representing Marginal and average product change, if capital K is
doubled to the value of 4 (and still fixed). Are the marginal and average product of labor
different? Draw the new figure. Is the value of L that maximizes the average product of labor
changed?
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