Consider a firm that produces output (y) using only two inputs (A and B). The firm has a perfect substitutes production technology and a productionfunction of the formf(A, B) = 5A + 8B.%3DSuppose the firm is currently using 200 units of input B.What is the marginal product of inputA when A100?500What is the marginal product whenA150?750Give your answers to two decimal places.

Two inputs are perfect substitutes when only one of them is enough to produce output.

Consider a firm that produces output (y) using only two inputs (A and B). The firm has a perfect substitutes production technology and a production function of the form f(A, B) = 5A + 8B. Suppose the firm is currently using 200 units of input B. What is the marginal product of input A when A = 100? 500 What is the marginal product when A = 150? 750 Give your answers to two decimal places.

Consider a firm that produces output (y) using only two inputs (A and B). The firm has a perfect substitutes production technology and a production function of the form f(A, B) = 5A + 8B. Suppose the firm is currently using 200 units of input B. What is the marginal product of input A when A = 100? 500 What is the marginal product when A = 150? 750 Give your answers to two decimal places.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

What is the difference between a fixed input and a variable input?
I am having trouble finding out the formulas to complete this question: The production function for a firm is q = -0.6L3 + 18L2K + 10L where q is the amount of output, L is the number of labor hours per week, and K the amount of capital. The wage is $100 and the rental rate is $800 per timeperiod. Using Excel, calculate the total short-run output, q(L), for L = 0, 1, 2, …, 20, given that capital is fixed in the short run and K = 1. Also calculate the average product of labor; APL, and the marginal product of labor, MPL. For each quantity of labor in (a), calculate the variable cost, VC; the total cost, C; the average variable cost, AVC; the average cost , AC; and the marginal cost, MC. Using excel, draw the AVC, AC, and MC curves in a diagram. You will not be able to solve the total product curve for L as a function of output. So, instead construct a table. Headings: L q(L) APL MPL VC TC AVC AC MC w/APL w/MPL
Consider the production function f (x1, x2)=min{x1, x2}. Assume the price of the inputs are w1 and w2 1)How much does production increase if I increase the quantity of input 1 by one unit while holding constant the quantity of input 2? How does this imply about the marginal product of the factors under this technology? 2)Do the factors exhibit decreasing marginal product?
Sam Malone is considering renovating the bar stools at Cheers.The production function for new bar stools is given byq = 0.1k 0.2l0.8 where q is the number of bar stools produced during the renovation week, k represents the number of hours of bar stoollathes used during the week, and l represents the number ofworker hours employed during the period. Sam would like toprovide 10 new bar stools, and he has allocated a budget of$10,000 for the project.a. Sam reasons that because bar stool lathes and skilled barstool workers both cost the same amount ($50 per hour),he might as well hire these two inputs in equal amounts.If Sam proceeds in this way, how much of each input willhe hire and how much will the renovation project cost?b. Norm (who knows something about bar stools) arguesthat once again Sam has forgotten his microeconomics.He asserts that Sam should choose quantities of inputs sothat their marginal (not average) productivities are equal.If Sam opts for this plan instead, how much of…