Economic Assignment
John works 40 hours a week managing his own business, without drawing a salary. He could be earning $600 a week doing the same job for his former employer. He has invested $100,000 of his own money in his business and owes the bank $100,000. The interest on his bank debt is $200 a week. If John's accounting profit is $1,000 per week, what is his economic profit?
• Consider the production schedule below. Where is the average product of labor maximized and at what point does diminishing marginal product of labor set in?
• Using regression analysis, where labor is the "X" variable, find the best production equation to estimate total output.
|
output
|
labor
|
|
0
|
0
|
|
6
|
1
|
|
16
|
2
|
|
29
|
3
|
|
44
|
4
|
|
55
|
5
|
|
60
|
6
|
|
62
|
7
|
|
62
|
8
|
|
61
|
9
|
|
59
|
10
|