PS4 solutions - Problem Set Four Answer Key Sarah Reynolds 1 If w=$3 and r=$6 draw the isocost lines that correspond to a total expenditure of $90 and

PS4 solutions - Problem Set Four Answer Key Sarah Reynolds...

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1 M P AP Problem Set Four: Answer Key Sarah Reynolds 1. If w=$3 and r=$6, draw the isocost lines that correspond to a total expenditure of $90 and $180 per unit of time. K 30 15 30 60 L 2. What is the relationship between the law of diminishing marginal returns and the slope of the short run marginal cost curve?
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3. If the long run average total cost curve is rising beyond some point, what can we say about returns to scale in production? 4. The marginal product of labor in the production of computer chips is 50 chips per hour. The marginal rate of technical substitution of hours of labor for hours of machinery is 0.25. What is the Marginal Product of Capital? 5. Fill in the gaps in the table below (Q
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  • Fall '09
  • Economics, Marginal product, Economics of production, Cost curve

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