{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Topic 5 Solutions

Topic 5 Solutions - TOPIC 5 PRACTICE PROBLEMS1 Problem 1...

This preview shows pages 1–2. Sign up to view the full content.

TOPIC 5 PRACTICE PROBLEMS 1 Problem 1. Short Run Production and Cost A quarry produces output x of gravel with k = 2 units of capital and s = 1 acre of land. Labor (h) is the variable input in the SR. A. Fill in the blanks in Table A and graph the total, average and marginal product curves. Diminishing returns to labor begin at h >= 2 (At h=2, marginal productivity peaks and after that declines) B. Assume capital costs R = \$3/unit, land rents at P s = \$4/acre, and labor costs W = \$6/hour. Table B has SR cost data for the quarry. Fill in the blanks, then graph the total, average and marginal cost curves. C. Diminishing returns to labor begin at h _ 2_ D. Increasing marginal costs begin at x __10____ 1 Some answers provided in boldface . TP Table A – SR Production k s h x p AP h MP h 2 1 0 0 /////// //////// 2 1 1 2 2 2 2 1 2 10 5 8 2 1 3 15 5 5 2 1 4 18 4.5 3 2 1 5 20 4 2 2 1 6 21 3.5 1.0 AP MP Table B – SR Costs x p FC VC TC AFC AVC ATC MC 0 10 0 10 /////// /////// /////// /////// 2

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

Topic 5 Solutions - TOPIC 5 PRACTICE PROBLEMS1 Problem 1...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online