ECON 310 Lecture 3: p310x3ans
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Department
Economics
Course
ECON 310
Professor
E Funkhouser
Semester
Spring

Description
Economics 310 Problem Set 3 Answer Guide .6 1. (8 points) Consider the onefactor production function Q = 4 L for a firm that faces a wage of 10 and has fixed costs of 6.67. a) Draw this production function. Include the values for Q at L=4 and L=8 Production Function 20 18 16 (8, 13.93) 14 (4, 9.19) 12 (3, 7.73) 10 Out8ut 6 4 2 0 042 24 160 18 1 Units of Labor b) What is the marginal product using the discrete change from L=3 to L=4? What is the instantaneous marginal product at L=4? Marginal Product (discrete) = QL = (9.197.73)(43) = 1.47 Marginal Product continues = derivative .2 .2 = (4) (.6) L = = 2.4 (4) = 1.38 c) On a separate graph draw the marginal product and average product. Include the values for L=4 and L=8 Average Product (top), Marginal Product (bottom) 6 4 (4, 2.30) Output (8, 1.74) 2 (4, 1.38) (8,1.04) 0 4 2 2 416 18 1 Units of Labor
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