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Technical Problemschapter 10 Page 380 1 The Following Cubic Equation Is A Long R

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Technical Problems—Chapter 10

Page 380

1. The following cubic equation is a long-run production function for a firm:

Q = -0.002K3L3 + 6K2L2

Suppose the firm employs 10 units of capital.

a. What are the equations for the total product, average product, and marginal product of labor curves?

b. At what level of labor usage does the marginal product of labor begin to diminish?

c. Calculate the marginal product and average product of labor when 10 units of labor are being employed.

Now suppose the firm doubles capital usage to 20 units. d. What are the equations for the total product, average product, and marginal product of labor curves?

e. What happened to the marginal and average product of labor curves when capital usage increased from 10 to 20 units? Calculate the marginal and average products of labor for 10 units of labor now that capital usage is 20 units. Compare your answer to part c. Did the increase in capital usage affect marginal and average product as you expected?

Running Head: ECONOMETRIC OF LABOR Econometric of LaborStudent’s NameUniversity of Affiliation 1 ECONOMETRIC OF LABOR 2QUESTIONS a) Total product, average product, and marginal product of…

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