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Unformatted text preview: The family’s harvest in thousands of bushels is represented by q. Assume that the family has signed contract with their neighbor to lease out all but 16 acres of their land. They are keeping these 16 acres in production. (7 points) What is the farm’s production function for this period? (7 points) 1) Production Function a) Three Equations i) Why q and not Q ii) Total Product (1) TP = q(X 1 ,X 2 ) iii) Marginal Product (1) MP 1 = δ q(X 1 ,X 2 )/ δ X 1 iv) Average Product (1) ATP 1 = q(X 1 ,X 2 )/X 1 (2) In common parlance, productivity refers to average productivity Answers TP = q = 8L 1/4 AP L = 8L-3/4 MP L = 2L-3/4 AP K = 2L 1/4 MP K = n/a q = L 1/3 (27) 2/3 = 9 L 1/3 = 90 L = 1,000 TP = 32 K 1/2...
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- Spring '08
- Economics, frank, blue book, 2L