This preview shows pages 1–2. Sign up to view the full content.
Econ 100B: Tang
Winter Quarter 2009
Homework 2: Ch 6 and Ch 7
Due Thursday January 22, at the beginning of class.
1) Say the production function for a foam fingers is given by:
3
3
2
2
600
L
K
L
K
q

=
.
If K=1, over what range of L will the function have diminishing marginal product of
labor?
2) Say the production function for stuffed penguins is given by:
2
2
2
.
8
.
L
K
KL
q


=
a. Graph the total and average product of labor curves if K=10.
Find the
level of labor that maximizes average product and the number of stuffed
penguins produced with that level of labor.
b. Graph the marginal product of labor curve, again assuming K=10.
Find
the level of labor where MP
L
=0.
c. How would your answers change if K=20?
d. Does the function exhibit decreasing, constant, or increasing returns to
scale?
3) Say a firm’s production function is given by: q=min(5K,10L), and that rental
rates for capital is r=1, and the wage for labor is w=3.
Suppose that K=10 in the
short run.
Calculate the firm’s shortrun total, average, and marginal cost curves.
What’s the marginal cost of the 10
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.
 Spring '09
 TANG
 Microeconomics

Click to edit the document details