Output per worker ($ thousands) 0 0 Capital equipment per worker ($ thousands) Which TWO of the following statements are correct? Select one or more: a. The slope of the function is the marginal product of capital. b. The figure shows that each extra $ of capital per worker raises output per worker by an equal amount. c. The function is "convex" (¿.e. it has a slope which increases as capital per worker rises). Od. The figure shows that higher capital per worker increases output per worker. Production function

Output per worker ($ thousands) 0 0 Capital equipment per worker ($ thousands) Which TWO of the following statements are correct? Select one or more: a. The slope of the function is the marginal product of capital. b. The figure shows that each extra $ of capital per worker raises output per worker by an equal amount. c. The function is "convex" (¿.e. it has a slope which increases as capital per worker rises). Od. The figure shows that higher capital per worker increases output per worker. Production function

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following diagram of the per-worker production function (output per worker as a function of capital per worker) Production function Capital equipment per worker (S thousands) Which 2 of the following statements are correct? Select one or more: O a. The higher capital per worker is, the higher the marginal product of capital is. O b. The diagram is consistent with the diminishing marginal product of capital. Oc. When workers have less capital, an increase in capital per worker has much more impact than when they already have a lot. O d. The slope of a tangent to the curve shows the marginal product of labour Output per worker (S thousands)
Assume that Economyland’s production function is Y = F (K, L) = K 0.5 L 0.5Where Y is output level, K is the amount of capital input, and L is the amount of laborinput. a) What is the per-worker production function, y= f (k) for Economyland? b) Assume that 10 percent of capital depreciates each year and savings rate is 20 percent,find the steady-state level of capital per worker for Economyland. Then find the steady-state levelof income per worker and steady-state level of consumption per worker. c) Is it possible to save too much? Why?
Suppose that the production function is What is the average product of labor AP₁, holding capital fixed at K? OA. APL = L-0.25 0.25 B. APL= q/L. O C. APL = 0.75L-0.250.25 q=L0.75K0.25 D. Both a and b. E. All of the above.
8. If Y-AK0.5 10.5 and A, K, and L are all 100, the marginal product of capital is: A) 50 B) 100. C) 200. D) 1,000.
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1. Assume a daily production function for a firm is Q= min(3L, 4K) a, If L = 100 and K = 100 what quantity is produced? Explain why. b. What would be the cost-minimizing labor and capital combination for this firm to produce Q = 1200? (show your work) Labor = Capital = At this level of production from part b (Q-1200), if the wage rate is: w- $30 and the rental rate of capital is: r= $100, what is the total cost of production? (show your calculations) C.
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5. A company that produces auto parts has a production function of Q = 300 L-75 K-5. %3D If L= 250 and K= 25, what is the output of auto parts? If L increases to 350, what is the output of auto parts? What does the change in output show regarding labor as a factor of production?
How does the slope of the production function illustrate diminishing returns? The slope of the production function becomes steep as the quantity of increases because of diminishing returns. A. more; capital B. more; labor O C. less; labor D. less; capital Click to select your answer. MacBook Air 吕0 000 000 FS F4 F3 esc F2 F1 % #
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3. Theo employs labor at a competitive wage (W) of $3 per unit, and he employs capitalat a competitive rental rate (R) of $6 per unit.a. State the cost-minimizing rule. You must provide both a written statement of it, and state it as anequation.b. At Theo’s current combination of labor and capital, the marginal product of labor (MPL) is twiceas large as the marginal product of capital (MPK). Is Theo currently employing the optimal ratio oflabor and capital? If not, how should he adjust his hiring of labor and/or capital? Explain.
PS3 (2) Question: What is the marginal product of capital? Given: * The marginal product of labor in the production of computer chips is 50 chips per hour. * The marginal rate of technical substitution of hours of labor for hours of machine capital is 1/4. * MRTS MPL/MPK =