Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 17.2, Problem 4ST
To determine
Determine the variables that are shift factors.
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Suppose a soap-manufacturing production process is described by the following
equation:
Y = a + b log K + с log L
Where,
Y= Output (number of soaps produced)
K=Capital
L=Labor
a, b and c are constants
Suppose 0<a<1, 0< b<1
a. Find the Marginal Product of Labor (MPL) and Marginal Product of Capital (MPK)
in the production of soap
b. Is MPL diminishing, increasing or constant as L increases?
c. Is MPK diminishing, increasing or constant as K increases?
Consider the following production function: Q = (6L + 3K)¹/2
1. What is the Marginal Product of Labor (MPL)? What is the Marginal Product of Capital
(MPK)? Are they diminishing?
2. What is the Average Product of Labor (APL)? What is the Average Product of Capital (MPK)?
3. What is the TRSL,K? Is the absolute value of TRSLK diminishing in L or K?
4. Are there constant, decreasing, or increasing returns to scale?
The period of a time when a firm is able to change all of inputs factors of production is called the:A) economic termB) short runC) accounting termD) long run
Chapter 17 Solutions
Economics (MindTap Course List)
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- Explain the consequences to the farmer if the production function for milk were a linear function of the amount of feed fed to each cow.arrow_forwardAn increase in the number of hours worked would shift the production function upward shift the production function downward shift the production function outward not shift the production functionarrow_forwardA firm can manufacture a product according to the production function:Q=F(K,L)=K^(3/4) L^(1/4).a.Calculate the average product of labour, AP_L, when the level of capital is fixed at 81 units and the firm uses 16 units of labour. How does the average product of labour change when the firm uses 256 units of labour? b.Find an expression for the marginal product of labour, MP_L, when the amount of capital is fixed at 81 units. Then, calculate the marginal product of labour for 16 and 81 units of labour. c.Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit and can hire labour at $50 per unit, how many units of labour should the firm hire in order to maximize profits?arrow_forward
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