Consider the following production function that depends only on labor:Q = 4L+ 12L² - 6L³ 1. Compute the APL (average product of labor). 2. Compute the MPL (marginal product of labor). 3. What is the value of L* at which APL is the highest? 4. For L > L*, which one is bigger, APL or MPL? How about when L < L* and L = L*? 5. Draw APL and MPL on the y-axis as a function of L on the x-axis. Label the point of the intersection of APL and MPL.

Consider the following production function that depends only on labor:Q = 4L+ 12L² - 6L³ 1. Compute the APL (average product of labor). 2. Compute the MPL (marginal product of labor). 3. What is the value of L* at which APL is the highest? 4. For L > L, which one is bigger, APL or MPL? How about when L < L and L = L*? 5. Draw APL and MPL on the y-axis as a function of L on the x-axis. Label the point of the intersection of APL and MPL.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

Consider the following production function that depends only on labor:Q = 4L + 12L² - 6L³
1. Compute the APL (average product of labor).
2. Compute the MPL (marginal product of labor).
3. What is the value of L* at which APL is the highest?
4. For L > L*, which one is bigger, APL or MPL? How about when L < L* and L = L*?
5. Draw APL and MPL on the y-axis as a function of L on the x-axis. Label the point of the
intersection of APL and MPL.

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Step 4: 3. The Value of L*, when APL is the highest:

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Step 5: 4. L>L*, L<L*, L=L* instances

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