Exercise 1 Oscar, a woodworker, builds coffee tables using both labor (L) and tools (capital, or K). His production function for coffee tables is q(L, K) = 4√LK. a) Can Oscar build any coffee tables without tools? b) Can Oscar completely mechanize coffee table production? c) Oscar currently has 16 tools, and in the short run he can neither acquire more tools nor sell existing tools. That is, K = 16. Write the equation for Oscar's short-run production function, showing output as a function of labor only. d) Graph the production function you found in (c), which labor on the horizontal axis and output on the vertical axis. [Hint: Don't plot every possible amount of labor; instead, choose convenient levels of L that are perfect squares: 0, 1, 4, 9, and so on] e) Fill out the table below: Labor 0 1 2 3 4 5 6 7 8 9 10 Total Output Average Product Marginal Product

Exercise 1 Oscar, a woodworker, builds coffee tables using both labor (L) and tools (capital, or K). His production function for coffee tables is q(L, K) = 4√LK. a) Can Oscar build any coffee tables without tools? b) Can Oscar completely mechanize coffee table production? c) Oscar currently has 16 tools, and in the short run he can neither acquire more tools nor sell existing tools. That is, K = 16. Write the equation for Oscar's short-run production function, showing output as a function of labor only. d) Graph the production function you found in (c), which labor on the horizontal axis and output on the vertical axis. [Hint: Don't plot every possible amount of labor; instead, choose convenient levels of L that are perfect squares: 0, 1, 4, 9, and so on] e) Fill out the table below: Labor 0 1 2 3 4 5 6 7 8 9 10 Total Output Average Product Marginal Product

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.14P

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