Unformatted text preview: function for 0 ≤ L ≤ 25 in the case where K is fixed at 4. b. Graph the marginal product of labor functions for each production function for 1 ≤ L ≤ 25. c. Do these production functions exhibit diminishing marginal returns to labor? Explain. d. For each production function, sketch the isoquants corresponding to production levels of 8 and 16. Be sure to plot at least 3 points on each isoquant. e. For each production function, calculate the marginal rate of technical substitution between labor and capital (expressed in units of capital per unit of labor) at the input bundle (4,4). f. Do these production functions exhibit diminishing marginal rates of technical substitution? g. For each production function, determine whether it exhibits increasing returns to scale, constant returns to scale, or decreasing returns to scale. 9. What is the difference between “diminishing marginal returns” and “diminishing total returns”? Is it possible to have diminishing marginal returns without also having diminishing total returns? Explain. 10. Use the relationships between total product, average product, and marginal product in the short run to fill out the table below. L q APL MPL 0 0 1 220 2 300 270 3 4 1100 200 5 ‐‐‐‐ 11. What does it mean for a production process to exhibit “diminishing marginal returns” to all inputs? What does it mean for a production process...
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- Spring '14
- Utility, $100, $400, $120, $4000