# 300hw2answer - As long as the marginal cost of producing...

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Homework 2 Answer Key 6.9 a. q = 100 KL  = 1,000 so KL  = 10, or, K L = 100. b K = 10, L = 10 AP L = q/L = 1,000/10 = 100 boxes per hour per worker. c If q = 200 KL  = 1000 KL  = 5, or, KL = 25. Isoquant shifts to q' 0 . Now, if K = 10 L = 2.5 AP L = q/L = 1,000/2.5 = 400 boxes per hour per worker. 7.5 a. q = 2 K L × K = 100, q = 2 100 . L × q = 20 . L 2 2 20 400 100 100 q q L so L q STC vK wL = = = + = + b. 50 25, 106.25, 4.25 0.5 50, 125, 2.5, 1 100, 200, 2, 2 200, 500, 2.5, 4 q SMC If q STC SAC SMC If q STC SAC SMC If q STC SAC SMC If q STC SAC SMC = = = = = = = = = = = = = = = = =

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c. d. The curves intersect at q = 100.
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Unformatted text preview: As long as the marginal cost of producing one more unit is below the average cost curve, average costs will be falling. Similarly, if the marginal cost of producing one more unit is higher than the average cost, then average costs will be rising. Therefore, the SMC curve must intersect the SAC curve at its lowest point....
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300hw2answer - As long as the marginal cost of producing...

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