310-1 Winter 2008 PS4 Brief Answers

310-1 Winter 2008 PS4 Brief Answers - E.G f(1,1 = 3 f(2,2 =...

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Economics 310-1 Problem Set 4—Brief Answers Winter 2008 1. a) 550, b) 100, c) Yes, from 4 on., d) Yes, from 7 on. 2. See back of text. 3. 1) Slope downward. Why? Both inputs are productive. 2) Isoquants farther from origin identify higher output. Why? Inputs are productive. 3) Isoquants cannot intersect. Why? Transitivity. Properties 1) – 3) follow immediately by applying the methods we used when we considered IC’s. 4) Convex. Why? See handout. 4. i) A. Q = 6 + 4L , B. Nope, MP L = 4 which is constant. ii) A. Q = 2L 2 , B. Here MP L = 4L is increasing. 5. See back of text. 6. A. L 1 2 3 4 5 Q 10 15 19 22 24 MP L 10 5 4 3 2 So, yes. B. No. As inputs are doubled, output does not necessarily double.
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Unformatted text preview: E.G. f(1,1) = 3, f(2,2) = 15. 7. With an optimal allocation of time, the extra points earned from each extra hour of study would be the same across subjects. So, spend an extra two hours on art history, one extra hour on poetry. 8. See back of text. 9. MRTS = a/b 10. See back of text. 11. Choppers mfgd TC TFC TVC ATC AVC AFC MC 0 3000 3000 0 - - - -1 5400 3000 2400 5400 2400 3000 2400 2 8600 3000 5600 4300 2800 1500 3200 3 14000 3000 11000 4667 3667 1000 5400 4 22100 3000 19100 5525 4775 750 8100 5 34000 3000 31000 6800 6200 600 11900 6 48000 3000 45000 8000 7500 500 14000 12. This follows immediately from MC = w/MP L and AVC = w/AP L ....
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