PS 6 Sol - UNIVERSITY OF WISCONSIN Economics 101 Spring...

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UNIVERSITY OF WISCONSIN Economics 101 Spring 2008 Problem Set 6 Solutions 1. a) The marginal product of the 4 th worker equals 4 It is the change in Q caused by adding the 4 th worker so it is 16-12=4 b) AP= Q/L = 12/3= 4 c) Technically inefficient point is point c since it is below the production curve, i.e. you can produce 12 units of output with 4 workers (point b) but instead you produce way less. Unattainable point is point a since it is above the production curve. With 4 workers you can never produce more than 12 units of output with the given technology. (Remember that all the points on the production curve give you the maximum possible output you can produce for each given input level (technically efficient points). 2. a) Fill out the missing values at the table below. Columns notation: quantity (Q), total cost (TC), fixed cost (FC), variable cost (VC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC).
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This note was uploaded on 07/13/2008 for the course ECON 101 taught by Professor Hansen during the Spring '07 term at Wisconsin.

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PS 6 Sol - UNIVERSITY OF WISCONSIN Economics 101 Spring...

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