For the table given
The first two columns in the table give a firm's short-run production function when the only variable input is labor, and capital (fixed input) is held constant at 5 units. The price of captial is $2,000 per unit, and the price of labor is $500 per unit.
a. Complete the table
b. What is the relationship between the average variable cost and marginal cost? Between the averae total cost and marginal cost?
c. What is the relation between average product and average variable cost? Between marginal product and marginal cost?
|
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Total |
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__________________________ |
| Units of |
|
Average |
Marginal |
|
|
|
|
| labor |
Output |
Product |
Product |
Fixed |
Variable |
Total |
|
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|
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| 10 |
|
|
|
|
|
|
|
| 20 |
4,000 |
|
|
|
|
|
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| 40 |
10,000 |
|
|
|
|
|
|
| 60 |
15,000 |
|
|
|
|
|
|
| 80 |
19,400 |
|
|
|
|
|
|
| 100 |
23,000 |
|
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|
|
|
Average |
|
|
|
|
_______________________________ |
| Units of |
|
|
|
|
Marginal |
| labor |
Output |
Fixed Cost |
Variable Cost |
Total Cost |
Cost |
|
|
|
|
|
|
| 10 |
|
|
|
|
|
| 20 |
4,000 |
|
|
|
|
| 40 |
10,000 |
|
|
|
|
| 60 |
15,000 |
|
|
|
|
| 80 |
19,400 |
|
|
|
|
| 100 |
23,000 |
|
|
|
|
Fixed costs are 5 units @ $2,000 per unit
Variable costs are $500 per unit
Just fill out the table, don't do parts b & c