Neoclassical Production and Costs

Assume the following production function: y = 2x₁^.5 + 3x₂^.5

a. Suppose x₂ = 16, derive the marginal product schedule for x₁. In which direction is it moving?

b. What returns to scale does the production function show?

c. Consider p₁ = $4.00, p₂ = $2.00, and x₂ = 16; for the specified values of y find out average fixed costs, average total costs, average variable costs, and marginal costs:

y x₂ x₁ AFC AVC ATC MC

12 16

13 16

14 16

15 16

16 16

17 16

18 16

View Complete Question

Related Questions in Microeconomics

Q : Marginal Productivity Theory of Income

The income distribution into a market economy is primarily found by differences within: (1) effort and sacrifice alone. (2) resource ownership and resource prices. (3) birth and social standing. (4) Lorenz coefficients. (5) political

Q : Generate entry and exit long-run

Purely competitive firms regulate to the optimum size within the long run since: (w) managers are more interested in efficiency than profit. (x) entrepreneurs want to do what is good for society. (y) entry and exit generate long-run equilibrium where

Q : Problem on price elasticity The firm’s

The firm’s net revenue grows whenever the price of a good is cut when the price elasticity of: (i) Demand surpass the price elasticity of supply. (ii) Replacement goods are less than one. (iii) Supply is in an associatively elastic range. (iv) D

Q : Illustrate ready-to-eat cereal industry

Brands of ready-to-eat cereal by Kellogg, Post, General Mills and Quaker [for example Frosted Flakes, Raisin Bran and Cheerios] account for more 85 percent of all breakfast cereals sold. Here the ready-to-eat cereal industry is an illustration of: (w)

Q : Implications of law of demand what are

what are the implications of law of demand to the government,household and business

Q : Initial point to identify maximizing

Nostalgia Corporation has controlled to lock-up the rights to each black-and-white film ever made, as well as the response to its infomercials has been astounding. The initial point Nostalgia requirement to identify in its quest to maximize profit is:

Q : Problem related to rises japanese yen

Normal 0 false false

Q : Average Variable Cost-Average Total

Describe the relationship among Average Variable Cost (AVC) Average, Total Cost (ATC) and marginal Cost (MC)? Answer: A) If MC

Q : Standard categories of economic

Standard categories of economic discrimination which tend to make income less equally distributed do not comprise: (1) wage discrimination (2) employment discrimination (3) occupational discrimination (4) human capital discrimination (5) income discri

Q : Economic profits in the long run In

In this illustrated figure in below the firm probably to have economic profits in the long run would be as: (w) Firm A. (x) Firm B. (y) Firm C. (z) Firm D.

Discover Q & A

Leading Solution Library

Avail More Than 1433732 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1937203
Asked

3,689

Active Tutors

1433732

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment