A = 15, B = 4, C = 6, and D = 9
No credit without showing your work. Show how you reached your answer.
1. Suppose production is described as Q = 50K + 5KL. Is production increasing returns to scale (IRS), constant returns to scale (CRS) or decreasing returns to scale (DRS)?
2. Given the chart below, what is the average product of labor when _A_ units of labor are employed?
Labor/day output/day
12 372
13 429
14 476
15 495
16 512
3. Given the chart above, what is the marginal product of labor of the _A_th unit of labor?
A firm operates in the short run with total fixed costs of $8,000.00 and total variable costs (TVC) related to the quantity of output it produces as is below. Answer the 3 questions below with this information.
Q TVC
0 $0.00
1 $7,500
2 $13,500
3 $17,500
4 $21,000
5 $25,000
6 $29,500
7 $35,000
8 $42,500
9 $50,500
10 $62,200
4. Calculate average variable cost when output is __B___ units.
5. Calculate average total cost when output is _C_ units.
6. What is the marginal cost of the _D th__ unit of output.