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  • Exercises Topic 1

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    Lorena
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    This document contains three summaries of production function exercises: 1. The first exercise shows the total output, marginal product, and average product of a variable input as it increases from 0 to 6 units. Marginal product initially increases but then decreases after the fourth unit. 2. The second exercise classifies five production functions as exhibiting constant, decreasing, or increasing returns to scale based on the marginal products of inputs. 3. The third exercise examines the marginal products of two inputs, disk and floppy, and finds that disk has a higher marginal product when the level of one input is above 0.9664 and floppy has a higher marginal product below this level. Both marginal products are decreasing.

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    Microeconomic UCM 2018-2019

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    This document contains three summaries of production function exercises: 1. The first exercise shows the total output, marginal product, and average product of a variable input as it increases from 0 to 6 units. Marginal product initially increases but then decreases after the fourth unit. 2. The second exercise classifies five production functions as exhibiting constant, decreasing, or increasing returns to scale based on the marginal products of inputs. 3. The third exercise examines the marginal products of two inputs, disk and floppy, and finds that disk has a higher marginal product when the level of one input is above 0.9664 and floppy has a higher marginal product below this level. Both marginal products are decreasing.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    9 views1 page

    Exercises Topic 1

    Uploaded by

    Lorena
    This document contains three summaries of production function exercises: 1. The first exercise shows the total output, marginal product, and average product of a variable input as it increases from 0 to 6 units. Marginal product initially increases but then decreases after the fourth unit. 2. The second exercise classifies five production functions as exhibiting constant, decreasing, or increasing returns to scale based on the marginal products of inputs. 3. The third exercise examines the marginal products of two inputs, disk and floppy, and finds that disk has a higher marginal product when the level of one input is above 0.9664 and floppy has a higher marginal product below this level. Both marginal products are decreasing.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Exercise

    4 page 219

    Quantity of Total Marginal Product Average Product
    Variable Input Output of Variable Input of Variable Input
    0 0 - -
    1 225 225 225
    2 600 375 300
    3 900 300 300
    4 1140 240 285
    5 1365 225 273
    6 1350 -15 225

    Exercise 8 page 220

    a. CRS ; 𝑀𝑃! = 3 and 𝑀𝑃! = 2. They are constant.
    b. DRS ; 𝑀𝑃! = 𝑀𝑃! = (2𝐿 + 2𝐾)!!/! . They are decreasing in L and K,
    respectively.
    c. IRS ; 𝑀𝑃! = 3𝐾 ! , constant (it does not dependo n L). 𝑀𝑃! = 6𝐿𝐾, increasing
    in K.
    ! ! ! !
    ! !
    d. CRS ; 𝑀𝑃! = ! 𝐿!! 𝐾 ! and 𝑀𝑃! = ! 𝐾 !! 𝐿! . They are decreasing in L and K,
    respectively.
    !
    e. DRS ; 𝑀𝑃! = 4𝐿!! , which is decreasing in L and 𝑀𝑃! = 4, which is constant.

    Exercise 9 page 220

    a. If K=L both produce the same output. If K>L FLOPPY produces more output
    and if L>K DISC produces more output.
    b. 𝑀𝑃! = 15 𝐿!!.! for DISK and 𝑀𝑃! = 14.95 𝐿!!.! for FLOPPY. For L < 0.9664
    FLOPPY has a larger 𝑀𝑃! and for L > 0.9664, it is DISK who has larger 𝑀𝑃! .
    Both are decreasing.

    Exercise 10 page 220

    a. 𝑀𝑃! and 𝑀𝑃! are both decreasing everywhere, so they are also at K=4 and
    L=49.
    b. It exhibits 𝐶𝑅𝑆.

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