1. Given the production function: q = 2KL, (a) Fill in the table below which has information on the short-run production function, the marginal product of labor (MPL), and the average product of labor (APL) if capital is held fixed at 3 units in the short-run. Labor Quantity of Output (MPL) (APL) 0 1 4 9 16 25 (b) Plot the short-run production function. (c) Plot the marginal and average products of labor on a new graph. (d) Does the law of diminishing marginal returns apply? If so, at what level of labor do diminishing marginal returns set in? (e) What is the relationship between the marginal product of labor (MPL) and the average product of labor (APL)? (f) If the amount of capital increased to 6 units, what would happen to your graphs in part C)?
1. Given the production function: q = 2KL, (a) Fill in the table below which has information on the short-run production function, the marginal product of labor (MPL), and the average product of labor (APL) if capital is held fixed at 3 units in the short-run. Labor Quantity of Output (MPL) (APL) 0 1 4 9 16 25 (b) Plot the short-run production function. (c) Plot the marginal and average products of labor on a new graph. (d) Does the law of diminishing marginal returns apply? If so, at what level of labor do diminishing marginal returns set in? (e) What is the relationship between the marginal product of labor (MPL) and the average product of labor (APL)? (f) If the amount of capital increased to 6 units, what would happen to your graphs in part C)?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 7E
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Transcribed Image Text:1. Given the production function: q = 2KL,
(a) Fill in the table below which has information on the short-run production
function, the marginal product of labor (MPL), and the average product of
labor (APL) if capital is held fixed at 3 units in the short-run.
Labor Quantity of Output (MPL) (APL)
0
1
4
9
16
25
(b) Plot the short-run production function.
(c) Plot the marginal and average products of labor on a new graph.
(d) Does the law of diminishing marginal returns apply? If so, at what level of
labor do diminishing marginal returns set in?
(e) What is the relationship between the marginal product of labor (MPL) and the
average product of labor (APL)?
(f) If the amount of capital increased to 6 units, what would happen to your graphs
in part C)?
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