HW%202 - Intermediate Microeconomic Theory Econ 300,...

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Intermediate Microeconomic Theory Econ 300, Section 12 Spring 2009 Professor Brown Problem Set #2 (80 points + 8 points XC) Choose eight questions to be worth 10 points each. The remaining two questions are extra credit and worth 4 points each. Submit eight questions for a potential score of 100%. Submit all ten questions for a potential score of 110%. Indicate which two questions are extra credit and turn in the answers to these two questions separately from the remaining eight questions. 1. Assume that the short run production process for Miss Cleo’s psychic reading services depends on only one input: Miss Cleo's time. The total number of over-the-phone palm readings per day is given by the following short-run production function: Q = 100 H 1/3 , where Q is the number of over-the-phone-palm readings per day and H is the number of hours Miss Cleo spends “reading palms” each day. a. Graph the relationship between Q and H. b. What is the equation for the average product curve? Graph the average-product curve. c. The equation for the marginal product curve is MP = (100/3) H - 2/3 . Graph this relationship and compare the marginal-product curve to the average-product curve. 2. Assume that the firm has the following production function: q = 4K 1/2 L 3/4 . The marginal product of labor for this production function is MP L = 3K 1/2 L -1/4 . The marginal product of
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This note was uploaded on 05/02/2009 for the course ECON 300 taught by Professor Danbrown during the Spring '09 term at University of Delaware.

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HW%202 - Intermediate Microeconomic Theory Econ 300,...

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