ECON501HW3-1 - ECON501 Professor Reagan Homework #3 1....

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Professor Reagan Homework #3 1. Complete the following table: Quantity of variable input Total output Marginal product of variable input Average product of variable input 0 0 - - 1 50 2 30 3 90 4 24 5 4 6 96 2. Labor input Capital input 1 2 4 8 16 1 1 2 2 8 4 2 2 2 8 4 4 2 4 2 8 4 4 2 8 8 8 4 4 2 8 8 2 16 4 4 2 8 8 2 16 a. Draw the isoquant associated with a constant output equal to 4. b. Does the isoquant display a diminishing marginal rate of technical substitution? c. If capital is fixed at 4 units, does the production function display diminishing marginal returns to labor? d. The marginal product of labor is L K MP L 2 = , while the marginal product of capital is K L MP K 2 = . What is the expression for the marginal rate of technical substitution? e. Draw the isoquants at output equal to 2, 4, and 8. Does the production function display constant returns to scale when all factors are variable? 3.
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This note was uploaded on 07/17/2008 for the course ECON 501.01 taught by Professor Reagan during the Fall '07 term at Ohio State.

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ECON501HW3-1 - ECON501 Professor Reagan Homework #3 1....

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