This preview has intentionally blurred sections. Sign up to view the full version.
View Full DocumentThis preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
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 ½ L ¾ 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?...
View
Full Document
 Spring '11
 MURRAY
 marginal cost function, average cost function, Average Marginal Relationship

Click to edit the document details