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Week 3 Team Assignment

Week 3 Team Assignment - Denise Seals#9 The production...

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Denise Seals # 9 The production function for the personal computers of DISK, INC is given by where q is the number of computers produced per day. K is hours of machine time, and L is hours of labor input. DISK's competitor, FLOPPY, INC is using the production function a. If both companies usr the same amounts of capital and labor, which will generate more output? X = Capital and Labor for both comapanies q = 10 X q = 10 X Both companies will generate the same amount of labor and capital. b. Assume that capital is limited to 9 machine hours, but labor is unlimited in supply. In which company is the marginal product of labor greater? Explain? Capital = 9 machine units Q MP Q MP L Firm 1 Firm 1 Firm 2 Firm 2 0 0 - 0 - 1 30.00 30.00 37.37 37.37 2 42.43 12.43 49.31 11.94 3 51.96 9.53 57.99 8.69 4 60.00 8.04 65.07 7.07 # 10 In Example 6.3, wheat is produced according to the production function a. Beginning with a capital input of 4 and a labor input of 49, show that the marginal product of labor and marginal product capital are both decreasing. q = 10K 0.5 L 0.5 q = 10K 0.6 L 0.4 q = 10K 0.5 L 0.5 q = 10K 0.6 L 0.4 q = 10X 0.5 X 0.5 q = 10X 0.6 X 0.4 q = 10X (0.5+0.5) q = 10X (0.6+0.4)
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