G300 Homework Problems

For a cost function C = 50 + 3Q + 2Q2, the average fixed cost of producing 10 units of output is

5

For the cost function C(Q) = 50 + 3Q + 2Q2, the total variable cost of producing 2 units of output is

14

Suppose the production function is given by Q=6k+5l. What is the marginal product of capital when 10 units of capital and 10 units of labor are employed?

6

What is the average product of labor, given that the level of labor equals 20, total output equals 1200, and the marginal product of labor equals 200?

60

The production function for a competitive firm is Q = K.5L.5. The firm sells its output at a price of $10, and can hire labor at a wage of $5. Capital is fixed at one unit. The profit-maximizing quantity of labor is

1

Given the linear production function Q = 10K + 5L, if Q = 10,000 and K = 500, how much labor is utilized

1,000

For the cost function C(Q) = 50 + 3Q + 2Q2, the marginal cost of producing 2 units of output is

11

Which curves does the marginal cost curve intersect at the minimum point?

Average total cost curve and average variable cost curve

The production function = L.5K.5 is called

Cobb Douglas

When there are economies of scope between two products which are separately produced by two firms, merging into a single firm can

accomplish a reduction in costs

It is profitable to hire units of labor as long as the value of marginal product

exceeds wage

The combinations of inputs that produce a given level of output are depicted by

isoquants

Firm managers should use inputs at levels where the

marginal benefit equals marginal cost and value marginal product of labor equals wage

The absolute value of the slope of the isoquant is the

marginal rate of technical substitution

Changes in the price of labor cause

slope changes in the isocost line

Costs that are forever lost after they have been paid are

sunk costs

Costs that change as output changes are

variable costs

If the production function is Q = K.5L.5 and capital is fixed at 1 unit, then the average product of labor when L = 16 is

1/4

Suppose the production function is five by q=max{k,l}. How much output is produced when 10 units of labor and 9 units of capital are employed?

10

Suppose the production function is given by Q=6k+5l. What is the average product of capital when 10 units of capital and 10 units of labor are employed?

11