Assignment covers Chapter 6 Material
Answer
the following questions on a separate sheet of paper.
1.
Use the following production function to answer the questions below
where labor is measured in workers per day, capital is measured in
sewing machines available per day, and output is measured in jeans
per day.
Labor
1
2 3
4
5 6
7
8
Capital
1
5
24 34
38 40
41 41
37
2
10 36
54 62
68 71
72 70
3
11 40
63 73
82 89
93 93
Suppose a firm had three sewing machines and could vary only the amount
of labor input.
a.
Graph the production function
for jeans given three sewing machines.
b. Compute and graph the marginal product curve.
c.
At what amount of labor input
does the point of diminishing returns
appear in your graph of marginal product?
d.
Is total output still
increasing when marginal product begins to
diminish?
e.
When total output stops
increasing, what is the value of marginal
product?
2. Complete the following cost and revenue schedule. Round to two decimal places.
| Average | Average | Average | |||
| Rate of | Total | Marginal | Fixed | Variable | Total |
| Output | Cost | Cost | Cost | Cost | Cost |
| 0 | $200.00 | ||||
| 1 | $210.00 | ||||
| 2 | $230.00 | ||||
| 3 | $265.00 | ||||
| 4 | $320.00 | ||||
| 5 | $400.00 |
3.
Complete the cost schedules
above to answer the following questions.