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Unformatted text preview: A = 20 and B =100. Group Problem There are two possible methods to produce output y : Method 1 requires: a $200 investment with an additional $1 per unit of output. Method 2 requires: $10 investment and an additional $5 per unit of output. 1. Write down formulae for each method. 2. Derive the average, average variable and marginal cost curves for both methods. 3. What is the best method to use if 30 units is desired? What is the best method to use if 100 units is desired? 4. What is the break even point between the two methods? Group Problem Output = y = f(J,L) = .1J L 1. What are the returns to scale of this production function? 2. What is the Marginal Product of Labor when J = 100 ? 3. Is the Marginal Product of Labor increasing or decreasing?...
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This note was uploaded on 06/16/2011 for the course ECON 321 taught by Professor Murray during the Spring '11 term at South Carolina.
 Spring '11
 MURRAY

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