Question

Consider the following graph of a production function when capital is constant. (The following is a description of the figure: it shows a two-axis graph; the horizontal axis measures labor and the vertical axis measures output; for a K fixed, the graph shows that maximal production that the firm can achieve with different levels of labor; the graph starts at cero production for zero labor; then it is increasing in all of its range; three levels of labor are shown as reference; there are L1, L2, and L3; they are related as follows L1<L2<L3; the graph is convex from 0 to L1, that is, its slope is increasing; the graph is concave from L1 on, that is, its slope is decreasing; the line that is tangent to the curve at L2, passes through the origin of the graph.)

Denote by APL(L,K)=f(L,K)/L the so-called average product of labor (here f is the production function of the firm). From the graph we know that for the corresponding K:

APL(L1,K)=MPL(L1,K)

APL(L2,K)>MPL(L2,K)

APL(L1,K)<MPL(L1,K)

APL(L1,K)>MPL(L1,K)

APL(L2,K)<MPL(L2,K)

Find answers to questions asked by student like you

Q: A tradeoff is illustrated by?

A: A trade off is the opportunity cost of a good. In other words, it is the next best alternative that ...

Q: Draw a graph and complete a short-run cost table by using the information provided. (TP) (TF...

A: In the short run, a firm will have two types of cost: fixed cost and variable cost.Total fixed cost ...

Q: A firm has fixed costs of $60 and varlable costs as Indicated in the table below. Complete the table...

A: Total cost:Total cost for quantity 0 can be calculated as follows:

Q: 1.

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If y...

Q: The demand curve for a product is given by QDx = 1,200 – 3Px – 0.1Pz, where Pz=$300. a) What is the...

A: Own price elasticity of demand is the measure of change in the quantity demanded of a product due to...

Q: What is the effect of placing tariffs on products imported into the U.S. from other countries? Are t...

A: Import Tariffs: It refers to the tariffs that are imposed on the imported goods. They increase the p...

Q: Refer to the table. If seven barrels of oil are produced, this firm is making: a profit b...

A: If seven barrels of oil are produced, this firm is making: Profit as MR>MC – It is true as the fi...

Q: Hi! Can you help me with the question below? Matt has the choice between receiving $100 now or recei...

A: Matt has the choice between receiving $100 now or receiving $140 in two years. Simple interest formu...

Q: i need help with question 1

A: The indifference curve represents different combinations of goods that can be consumed by a consumer...