utility or Income Is 5. a. Complete the following table: b. Does this production function exhibit diminishing returns to labor? Explain Quantity of Variable Total Output Input Marginal Product of Average Product of Labor Labor 50 30 3 4 90 24 4 6. 96

utility or Income Is 5. a. Complete the following table: b. Does this production function exhibit diminishing returns to labor? Explain Quantity of Variable Total Output Input Marginal Product of Average Product of Labor Labor 50 30 3 4 90 24 4 6. 96

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 19PAE

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Exercise 11 Question Help Suppose that a firm's production function is: 112- q = 10L0.5K0.5 98- Its marginal product functions are: 84- MP, = 5KO.5/L0.5 - 0.5g/L 70- and MPK = 5L0.5/K.5 - 0.5g/K. 56- The cost of a unit of labor, w, is $50 and the cost of a unit of capital, r, is $50. Isoquants for output of 140 and 280 are illustrated in the figure to the right. 42- 28- Initially, the firm is producing 140 units of output and has determined that the cost-minimizing quantities of labor and capital are 14 and 14, respectively. 14- -q= 280 q= 140 98 Suppose now that the firm wants to increase output to 280 units. If capital is fixed 0- in the short run, how much labor will the firm require? 70 84 L, Units of labor 14 28 42 56 112 The firm will now require units of labor. (Enter your response rounded to two decimal places.) K, Units of capital