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HWK4 - 99 111 121 129 135 139 141 141 2 55 72 88 100 111...

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ECON 2010 Homework 4 Make a table showing the average product and marginal product of machines (two columns of values) when Stylish employs 8 workers. Sewing Machines Average Product Marginal Product 1 123 123 2 66 9 3 46.33 7 4 36 5 5 29.4 3 6 24.66 1 7 21 -1 8 18 -3 Draw an isoquant diagram for Q = 129, with machines on the vertical axis and labor on the horizontal. It must have the appropriate shape. Compute the marginal product of machines and labor between the two bold-faced values and show that the ratio of these marginal products equals the slope of the isoquant between these two points. 8 109 120 129 136 141 144 145 144 141 136 7 105 117 127 135 141 145 147 147 145 141 6 99 112 123 132 139 144 147 148 147 144 5 91 105 117 127 135 141 145 147 147 145 4 81 96 109 120 129 136 141 144 145 144 3 69 86
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Unformatted text preview: 99 111 121 129 135 139 141 141 2 55 72 88 100 111 120 127 132 135 136 1 39 57 73 87 99 109 117 123 127 129 1 2 3 4 5 6 7 8 9 10 Table 1: Sewing Machines v. Labor Input dQ/dK = Marginal Product of Capital: (129-109)/4 = 5 dQ/dL = Marginal Product of Labor: (129-109)/2 = 10 dQ_0 = dQ/dK * dK + dQ/dL * dL = 0 dK/dL = (-dQ/dL)/(dQ/dK) (-4/2) = (-10/5) = -2 Extra Credit: Stylish will never employ eight workers and eight machines. Economic activity occurs when marginal product is positive, decreasing, and less than the average product. At the stated conditions, the marginal product is negative, representing an inefficient configuration....
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