Question 2 - ProductionThe following table summarizes the short-run production function for your firm. Your product sells for $5 perunit, labor costs $20 per unit, and the rental price of capital is $100 per unit. Complete the following table, andthen answer the accompanying questions.a. Fill out the table above and show work and formulas used.b. Which inputs are fixed inputs? Which are the variable inputs? Explain how you know.c. How much are your fixed costs?d. What is the variable cost of producing 20 units of output?e. How many units of the variable input should be used to maximize profits?f. Over what range of variable input usage do increasing marginal returns exist? Explain.g. Over what range of variable input usage do decreasing marginal returns exist? Explain.h. Over what range of variable input usage do negative marginal returns exist? Explain.Bonus: What are your maximum profits?QKL5 02010 530 5460 5 680 5890 5 1095 5 1295 5 1490 5 1680 5 1860 5 2030 5 22MP-L AP-L AP-K VMP-L

Question 2 Production The following table summarizes the short-run production function for your firm. Your product sells for $5 per unit, labor costs $20 per unit, and the rental price of capital is $100 per unit. Complete the following table, and then answer the accompanying questions. a. Fill out the table above and show work and formulas used. b. Which inputs are fixed inputs? Which are the variable inputs? Explain how you know. c. How much are your fixed costs?

Question 2 Production The following table summarizes the short-run production function for your firm. Your product sells for $5 per unit, labor costs $20 per unit, and the rental price of capital is $100 per unit. Complete the following table, and then answer the accompanying questions. a. Fill out the table above and show work and formulas used. b. Which inputs are fixed inputs? Which are the variable inputs? Explain how you know. c. How much are your fixed costs?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

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$ I Short and Long Run Average and Marginal Cost TP₁ TP₂ B f A TP3 On the graph above, why does the red line intersect the green dashed line at TP2? The MP(L) in the short-run is equal to the MP(L) in the long-run. the Th MRTS in the Long-run is equal to the MRTS in the long-run None of these are true. The short-run total cost curve must be tangent to the Long-run total cost curve. The period of time considered is so short, both the short-run and long-run are the same. TP
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1. Suppose the production function is Q = 8L + 15K where Q is the quantity of output, L is the quantity of labor used in production, and K is the quantity of capital used in production. What can be said about this production function? It has Decreasing Returns to Scale It has Constant Returns to Scale It has Increasing Returns to Scale There isn’t enough information to determine the Returns to Scale for this production function 2. You’re dreaming of what to do during a nice summer day. You could mow the lawn which you would pay someone $15 to do for you. You could go for a walk which you value at $11. You could also take a nap and ignore everyone and everything else which you would pay $29 to do. If you to take a nap, what is your opportunity cost? Group of answer choices $29 $26 $15 $11
The law of diminishing marginal returns states: Select one: a. As a firm uses more of a variable factor of production, total product (TP) eventually decreases. b. As the size of a plant increases, marginal product (MP) eventually decreases. c. As a firm uses more of a variable factor of production, its average cost (AC) eventually decreases. d. As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the MP of the variable factor eventually decreases.