2. Suppose the production function for widgets is given by: f (K, L) 2* KL - K2/2- L2/2 Q 1 (a) Suppose L-5 (is fixed), derive an expression for and graph the total product of capital curve (the production function for a fixed level of labor) and the average productivity of capital curve. (b) At what level of capital input does the average productivity reach a maximum? How many widgets are produced at this point? (c) Again, assuming L=5, derive an expression for and graph the MPK curve. At what level of capital input does MPK =0? (d) Does this production function exhibit constant, increasing or decreasing returns to scale?
2. Suppose the production function for widgets is given by: f (K, L) 2* KL - K2/2- L2/2 Q 1 (a) Suppose L-5 (is fixed), derive an expression for and graph the total product of capital curve (the production function for a fixed level of labor) and the average productivity of capital curve. (b) At what level of capital input does the average productivity reach a maximum? How many widgets are produced at this point? (c) Again, assuming L=5, derive an expression for and graph the MPK curve. At what level of capital input does MPK =0? (d) Does this production function exhibit constant, increasing or decreasing returns to scale?
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.2P
Related questions
Question
Transcribed Image Text:2. Suppose the production function for widgets is given by:
f (K, L) 2* KL - K2/2- L2/2
Q
1
(a) Suppose L-5 (is fixed), derive an expression for and graph the total product of
capital curve (the production function for a fixed level of labor) and the average
productivity of capital curve.
(b) At what level of capital input does the average productivity reach a maximum?
How many widgets are produced at this point?
(c) Again, assuming L=5, derive an expression for and graph the MPK curve. At
what level of capital input does MPK =0?
(d) Does this production function exhibit constant, increasing or decreasing returns
to scale?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
