Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 7, Problem 2E
To determine
To evaluate the values of total product and marginal product and average product of labor from the given table.
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From your knowledge of the relationships among the various production functions, complete the following table:
Variable Input L Total Product Q Average Product AP₁ Marginal Product MPL
0
0
1
2
3
4
5
6
7
30
二二二二
120
20.00
24.00
15
||
45
-15
Please answer this question
Consider the following Cobb-Douglas production function, where a = ß = 0.5:
Q=K&LB.
Find the equation for the isoquant when Q = 4,000.
K=
= (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g.,
a fraction can be created with the / character.)
Chapter 7 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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- How would you determine that a two-input Cobb-Douglas production function has decreasing returns to scale (DRS), increasing returns to scale (IRS) or constant returns to scale (CRS) depending on whether β is larger than, smaller than, or equal to one?arrow_forwardGiven the following production function: q = 10KL. Assume that w = 25, r = 75 and C = 1200. (a) Mathematically find the minimum cost combination of capital and labour to produce a given level of output.b) Does the production function in part (a) show increasing returns to scale, decreasing returns to scale, or constant returns to scale? Explain. (c) Using isoquants and isocosts, graphically illustrate the effect of an increase in the wage rate, assuming the firm is producing at the same level of output.arrow_forwardQuestion 3 For each one of the following production function determine whether it has constant, increasing or decreasing return to scale (prove): a. F(K, L) = 5K+ 3L b. F(K,L) K0.7 + 10.3 c. F(K,L)= K0.210.1 = d. F (K, L) = 5 (+1)arrow_forward
- Undercover World, a book shop, has the following marginal physical product curve (labeled MPP) for its hourly production. Note: Marginal values are sometimes plotted between integers (to indicate that they represent changes incurred in moving from one integer to the next), and sometimes they are plotted directly on the integers with which they are associated. For the context of this graph, they are plotted between integers. For example, if the marginal physical product from one unit of labor to two is x, this point is plotted at (1.5, x). When labor increases from three to four workers, total physical product ______by _______per hour. Use the orange points (square symbol) to plot the total physical product curve on the following graph. Assume that if there are no workers, Undercover World does not produce output. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.arrow_forwardq = 35L + 40 K (1) (2) 0.5, For the production functions of (1) and (2) create the isoquants for q = 100, and for q = 144 with K on the vertical axis and L on the horizontal axis. (Use excel's scatter plot to draw these pictures. So, two pictures with two isoquants each.) Suppose that K is fixed at K = 9. Using excel draw the total product curves for equation (1). In a separate excel chart draw the marginal product and average product for K = 9 in equation (1). Give an explanation for the shapes of the total product, marginal product, and average product curve.arrow_forwardExplain the difference between increasing returns to scale and economies of scale.In what way are the two concepts sometimes related?arrow_forward
- Can you please assist on the followingarrow_forwardThe Long-run production function is given by; Y = 180 L0.8 K1.8Where, Y = Output (mt/day), L = Labour (hours/mt) K = Capita (Rs/mt)a) Calculate Marginal Product of Labour (MPL) and Marginal Product of Capital (MPK), if L=12 and K=20 .b) Derive the equation for Isoquent and graphically show it by assuming L= 10, 15, 20 25 and 30. c) Determine factor intensity and returns to scale of this production function. d) Prove that the elasticity of labour is 0.8 and elasticity of capital is 1.8 .arrow_forwardHow are increasing returns to scale for a long-run production function and a downward sloping long-run Average Cost curve related? Explain economic reasoning clearly.arrow_forward
- Determine the level of homogeneity and returns to scale for each of the following production function: Q= 0.9K0.2L0.6 Only typed Answerarrow_forwardSolve it correctly please.arrow_forwardQ2. Determine the returns to scale of the following production function: Hand written plzz Y = 5K0.5 +3L0.5 (a) constant (b) increasing (c) decreasing (d) indeterminatearrow_forward
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