2.

Consider a production function of the following form: X = 100 L ½ , where X= output

and L = input of labor (assuming other inputs are fixed).

a. Construct a figure like Figure 6-1 and a table like Table 6-1 for inputsof L = 0, 1,
2, 3, and 4.

Unit of labor Marginal Average

Total Product
input Product Product
0 0
100
1 100 100
41
2 141 70.5
32
3 173 57.7
27
4 200 50

150

100

50

0
1 2 3 4

b. Explain whether this production function shows diminishing returns to labor. What
values would the exponent need to take for this production function to exhibit
increasing returns to labor?

Berdasarkan data sebelumnya, fungsi produksi menunjukkan adanya diminshing

retur to laborn ketika ditambahnya input variabel dari 1 menjadi 2. Hal ini disebabkan
karena eksponennya bernilai ½ . Agar fungsi produksi dapat mengalami increasing
return to labor, eksponennya harus bernilai >1.
3. The following table describes the actual production function for oil pipelines. Fill in the
missing values for marginal products and average products:
(1) (2) (3) (4)
18-Inch Pipe

Marginal Average product

Pumping Total Product product (barrels (barrels per day
horsepower (barrels per day) per day per hp) per hp)
10,000 86,000

20,000 114,000

30,000 134,000

40,000 150,000

50,000 164,000

MP = TP2 – TP1 AV = TP/X

MP1 = 114,000 – 86,000 = 28,000 AV1 = 86,000/10,000 = 8,6

MP2 = 134,000 – 114,000 = 20,000 AV2 = 114,000/20,000 = 5,7

MP3 = 150,000 – 134,000 = 16,000 AV3 = 134,000/30,000 = 4,47

MP4 = 164,000 – 150,000 = 14,000 AV4 = 150,000/40,000 = 3,75

AV5 = 164,000/50,000 = 3,28

(1) (2) (3) (4)

18-Inch Pipe

Marginal Average product

Pumping Total Product product (barrels (barrels per day
horsepower (barrels per day) per day per hp) per hp)
10,000 86,000 8.6
28,000
20,000 114,000 5.7
20,000
30,000 134,000 4.47
16,000
40,000 150,000 3.75
14,000
50,000 164,000 3.28