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ECO 304K - HW 3 Answers - Brian Fontenot ECO 304K 34235...

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Brian Fontenot ECO 304K - 34235 Professor Ledyard T/Th 3:30 -5:00 Pm 10/20/07 Homework 3 Question 1: (8 points) Suppose that you own a firm that hires workers to make Doritos. You know the following relationship between the number of workers and output: # of Workers Total Output of Doritos in one hour 0 0 1 500 2 950 3 1350 4 1700 5 2000 6 2250 a. (2 points) Calculate the Marginal Product of labor for this firm. b. (2 points) Draw the production function for this firm. It does not have to be exactly to scale, but it should have the correct shape. Why does it have this shape? c. (2 points) Suppose the Doritos’ factory costs 500 to operate, and labor costs 50 per hour. Calculate the total cost for each of the above number of workers. d. (2 points) Draw the total cost function for this company. Why does it have the shape it does?
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