2) The table shows the combinations of labor and capital required to produce various level ofoutput.Capital1Labora. 2b. 4c. 6d. 82345252348131721 251016 21 26301118 24293412 20 26 32 3713 21 28 344018Assume that capital remains fixed while labor is the only variable input used in production. If thefirm is currently producing 26 units of output using three units of labor, what is the marginalproduct of labor at this point?55

The marginal product of labour is the additional output produced as a result of an unit increase in…

output. Capital 1 2 Labor a. 2 b. 4 c. 6 d. 8 3 4 5 37 42 1 2 8 13 17 21 25 11 10 16 21 26 30 18 24 29 34 37 12 20 26 32 13 21 28 34 40 55 Assume that capital remains fixed while labor is the only variable input used in production. If the firm is currently producing 26 units of output using three units of labor, what is the marginal product of labor at this point? K

output. Capital 1 2 Labor a. 2 b. 4 c. 6 d. 8 3 4 5 37 42 1 2 8 13 17 21 25 11 10 16 21 26 30 18 24 29 34 37 12 20 26 32 13 21 28 34 40 55 Assume that capital remains fixed while labor is the only variable input used in production. If the firm is currently producing 26 units of output using three units of labor, what is the marginal product of labor at this point? K

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that a firm uses just two factors of production. The table given below shows what happens to output as the firm increases one or both of these inputs. The effects of increasing the amounts of both inputs Situation (i) Situation (ii) Input Input 2 Output Input 1 Input 2 Output 1 1 12 1 14 2 2 24 2 2 24 3 3 36 3 2 32 4 4 48 4 2 38 5 60 2 42 Which situation represents the long run?
2. Table 1 below shows the number of baskets produced by a Bentle Weavers in the short run using three machines and labour. Use this table to answer the question below Capital 3 3 3 3 3 Labour 0 1 2 3 4 Total Product 10 Marginal Product 15 What is the maximum value of total product for this firm? a) 48 b) 25 c) 10 d) 40 Average Product 16 10
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.
Bozo is a clown. He wants to start a clowning business where he sends other clowns out to birthday parties. Use the graph to Birthday parties answer the questions. 20 19 18 17 16 15 14 13 12 What is the marginal product of the third worker? O 2 11 10 6. 8. 7. 3.0 9. 3. 2. I 2 3 9 10 4 56 8. This production function demonstrates Workers diminishing marginal costs. a negative marginal product of labor. diminishing marginal returns to labor. diminishing output.
Q. Table 3 above shows how output varies with only one variable input used in production. If the cost of a unit of labor is $500, what is the approximate marginal cost of the 230th unit of output? a. $2.50 b. $8.50 c. $12.50 d. $50.00 e. $100.00
3. We often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain.The marginal product of labor becomes negative when the slope of the production frontier begins to get shallower as we move toward more labor input.
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(Figure: Determining Marginal Returns) Based on both the table and the figure, adding a third worker leads to marginal returns. Average Product and Marginal Product Output 1 2 3 14 Labor 5 6 17 12 10 8 6 4 8 9 10 0 -2 BAY constant 2 Total Product O negative 5 12 21 31 40 48 54 57 57 increasing 54 diminishing 4 MP 5 7 9 10 9 8 6 3 0 3 6 Workers AP 5 6 7 7.75 8 8 7.71 7.12 6.33 5.4 8 10 12
4. At Alan's landscaping firm, labor is fixed in the short run. Increasing his use of capital always leads to additional output and his production function exhibits both increasing and diminishing marginal returns to capital at different points. Using a two-panel diagram, sketch the marginal, average, and total product of canital at Alan's firm. Your diagram does not need to be to scale, but must be internally consistent and consistent with both the information given and economic theory. Explain your diagram and the relationship between the different curves.