Exercise 1 Oscar, a woodworker, builds coffee tables using both labor (L) and tools (capital, or K). His production function for coffee tables is q(L, K) = 4√LK. a) Can Oscar build any coffee tables without tools? b) Can Oscar completely mechanize coffee table production? c) Oscar currently has 16 tools, and in the short run he can neither acquire more tools nor sell existing tools. That is, K = 16. Write the equation for Oscar's short-run production function, showing output as a function of labor only. d) Graph the production function you found in (c), which labor on the horizontal axis and output on the vertical axis. [Hint: Don't plot every possible amount of labor; instead, choose convenient levels of L that are perfect squares: 0, 1, 4, 9, and so on] e) Fill out the table below: Labor 0 1 2 3 4 5 6 7 8 9 10 Total Output Average Product Marginal Product

Exercise 1 Oscar, a woodworker, builds coffee tables using both labor (L) and tools (capital, or K). His production function for coffee tables is q(L, K) = 4√LK. a) Can Oscar build any coffee tables without tools? b) Can Oscar completely mechanize coffee table production? c) Oscar currently has 16 tools, and in the short run he can neither acquire more tools nor sell existing tools. That is, K = 16. Write the equation for Oscar's short-run production function, showing output as a function of labor only. d) Graph the production function you found in (c), which labor on the horizontal axis and output on the vertical axis. [Hint: Don't plot every possible amount of labor; instead, choose convenient levels of L that are perfect squares: 0, 1, 4, 9, and so on] e) Fill out the table below: Labor 0 1 2 3 4 5 6 7 8 9 10 Total Output Average Product Marginal Product

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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