Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
Question
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Chapter 11, Problem 17QE

(a)

To determine

Determine the average variable cost (AVC), average product (AP), marginal product (MP), and marginal cost (MC).

(b)

To determine

Graphically illustrate the average productivity curve and average variable cost curve.

(c)

To determine

Graphically illustrate the marginal productivity curve for labor.

(d)

To determine

Graphically proves that the marginal productivity curve and marginal cost curve are mirror images of each other.

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A production process uses two inputs, labor and capital. If the marginal product of labor per dollar is higher than the marginal product of capital dollar, what should the firm do to lower costs? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Increase output b Decrease output C Increase the amount of capital d Increase the amount of labor
8. Average and marginal product of labor Caroline's pizza restaurant uses a combination of workers and ovens to produce pizzas. The total number of pizzas produced per hour is given by the function q = 4K0.5 10.5, where K is the number of ovens and I is the number of workers. Although the two inputs are relatively substitutable, the number of ovens is fixed in the short run, and therefore Caroline is primarily interested in the marginal and average product of labor given her current number of ovens (4). Complete the following table using the production function given. Ovens Workers Pizzas Per Hour Average Productivity (K) (L) (9) 4 1 4 4 4 2 3 4 11.31 13.86 Given Caroline's production function, she faces marginal productivity of workers (q/L) 5.66 4.62 MPL returns to scale. However, you can see that when one input is held constant, the as more and more workers are added. Still holding the number of ovens (K) fixed at 4, it would take workers to produce 32 pizzas per hour.
Barb's Bakery employs three workers who produce 6 cakes per hour. After Barb hires a fourth worker, production increases to 12 cake per hour. Which of the following statements is TRUE? a. b. C. d. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is less than the average product of three workers, the average product must fall Because the marginal product of the fourth worker is less than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must fall.
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