Q2. The economist for the ABC Truck Manufacturing Corporation has calculated a production function for the manufacture of their medium-size trucks as follows: Q= 1.3*(L^0.75)*(K^0.3) Where Q is the number of trucks produced per week, L is the number of labor hours per day and K is the daily usage of capital investment. 1. Does the equation exhibit increasing, constant or decreasing returns to scale? Why? 2. Calculate the marginal product of labor and marginal product of capital using the below data? 3. How many trucks will be produced per week with the following amounts of labor and capital? Labor Capital 100 50 120 60 150 75 200 100 300 150

Q2. The economist for the ABC Truck Manufacturing Corporation has calculated a production function for the manufacture of their medium-size trucks as follows: Q= 1.3(L^0.75)(K^0.3) Where Q is the number of trucks produced per week, L is the number of labor hours per day and K is the daily usage of capital investment. 1. Does the equation exhibit increasing, constant or decreasing returns to scale? Why? 2. Calculate the marginal product of labor and marginal product of capital using the below data? 3. How many trucks will be produced per week with the following amounts of labor and capital? Labor Capital 100 50 120 60 150 75 200 100 300 150

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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