A
To ascertain:The production function for an I wheat farm as well as its output and inputs. Any special way the production takes place need to be described as well.
A
Answer to Problem 1RQ
The production function for an I wheat farm could be described as follows:
Where K stands for capital and L stands for labour.
Output is the wheat and the input is the capital.
Explanation of Solution
The production fuction for a wheat farm is supposed to be a two input function with labor and capital, that is, the production in the wheat farm depends on these two functions, K and L.
The output for the firm would be the wheat produced and the input used would be capital used for purchase of equipment. The production takes place by utilizing only two inputs.
Introduction:The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output.
B
To ascertain:The production function for a vegetable farm as well as its output and inputs. Any special way the production takes place need to be described as well.
B
Answer to Problem 1RQ
The production function for an A vegetable farm could be described as follows:
Where K stands for capital and L stands for labour.
Output is the vegetables produced and the input is the capital.
Explanation of Solution
The production function for a vegetable farm is supposed to be a two input function with labor and capital, that is, the production in the vegetable farm depends on these two functions, K and L.
The output for the firm would be the vegetable produced and the input used would be capital used for purchase of equipment. The production takes place by utilizing only two inputs.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output.
C
To ascertain:The production function for U steel corporation as well as its output and inputs. Any special way the production takes place need to be described as well.
C
Answer to Problem 1RQ
For U steel corporation a variable production function would be used.
The output will be the steel goods and the input used would be capital used for purchase of equipment or acquiring labor, raw materials etc.
Explanation of Solution
The production function of U steel corporation would be a variable production function because with the increase with the increase in number of machineries acquired with the capital the need for labor will reduce proportionately. The output produced would be steel goods and the inputs required for the production will be capital used for purchase of equipment or acquiring labor, raw materials etc.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output.
D
To ascertain:The production function for local arc wielding firm as well as its output and inputs. Any special way the production takes place need to be described as well.
D
Answer to Problem 1RQ
Fixed production function will be used for a local arc wielding firm. The output will be arc wielding services and the inputs will be capital used for purchase of equipment and labor
Explanation of Solution
Arc welding company − Since considering the inputs are capital and labor will be providing sustainability only to a small extent. Hence, fixed proportion function will be used for this kind of firm.
The output that the firm will produce are the arc wielding services and the inputs used will be capital for acquiring machinery and labor services.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
E
To Ascertain:The production function for S as well as its output and inputs. Any special way the production takes place need to be described as well.
E
Answer to Problem 1RQ
For S variable production function will be used. The output will be will be several variety of goods that are produced and the inputs will be capital used for purchase of equipment and labor
Explanation of Solution
S − Variable production function will be used in this case, as the increase in capital employed will be used to acquire machinery for processing purpose thereby minimizing the stress on acquiring labor. The output will be will be several variety of goods that are produced and the inputs will be capital used for purchase of equipment and labor
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
F
To Ascertain:The production function for J’s hot dog stand as well as its output and inputs. Any special way the production takes place need to be described as well.
F
Answer to Problem 1RQ
For J’s hot dog stand a fixed production would be used. The output will be the hot dogs and the inputs used will be labor and capital simultaneously.
Explanation of Solution
Hot Dog Stand − Since the services of labor is replaceable to a particular degree with the use of capital, the fixed proportion function can be used. While the output will be hot dogs, the inputs will be labor and capital.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
G
To Ascertain:The production function for M opera as well as its output and inputs. Any special way the production takes place need to be described as well.
G
Answer to Problem 1RQ
For M opera a fixed production function will be used. The output will be the opera performances and the inputs will be the performers, the opera house, capital etc.
Explanation of Solution
Opera Company − Since the inputs like labor are not substitutable, the fixed production function can be implemented. While the output is opera house performances, the inputs are performers, house, and capital and so on.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
H
To Ascertain:The production function for M museum of art as well as its output and inputs. Any special way the production takes place need to be described as well.
H
Answer to Problem 1RQ
For M museum of art a variable production function shall be used. The output produced will be the art collection display and the input will be capital.
Explanation of Solution
Museum of Art − For this particular case, the variable production function can be used, as the input of capital will minimize the employing of other factors. The inputs will be capital in the form of building, employment, equipment etc. while on the other hand the output will be art display.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
I
To Ascertain:The production function for National Institute of Health as well as its output and inputs. Any special way the production takes place need to be described as well.
I
Answer to Problem 1RQ
For National Institute of Health, fixed proportions production function will be used. The inputs utilized will be staff services and the output will be health services
Explanation of Solution
Health Institute − Since the inputs used in this institute are not substitutable in varying proportions, for this the fixed proportion function will be used. While the output will be health services, the inputs will be services such as staff and capital.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
J
To ascertain:The production function for Dr. S’s private practice as well as its output and inputs. Any special way the production takes place need to be described as well.
J
Answer to Problem 1RQ
For private practice a fixed proportion production function will be used. The output will be medical services while the inputs will be capital
Explanation of Solution
Private Practice − Here also the fixed proportion function will be used, the output will be medical services, and finally the input will be capital and materials and such other.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
K
To ascertain:The production function for P’s lemonade stand as well as its output and inputs. Any special way the production takes place need to be described as well
K
Answer to Problem 1RQ
For P’s lemonade stand a fixed production function will be used. The output will be lemonade and the input will be capital
Explanation of Solution
Lemonade Stand − In this scenario, the input of labor will be substitutable with capital. Therefore, a fixed production function will be used. The output will be lemonade and the inputs will be labor, capital and raw materials and so on.
Introduction:
The production function establishes relationship between the quantities of inputs introduced into the production activity and the output produced thereof. It tells the maximum quantity of output that can be produced with a given level of output
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Chapter 6 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
- Refer to the production table for jeans to answer several questions. Labor Input (Workere per Day) 3 2 4 5 Capital Input (Sewing Machines per Day) 0 1 2 3 4 Capital Input (Sewing Machines per Day) 3 Marginal Physical Product 0 units 0 0 0 0 0 (Click to select) V 0 1 0 0 15 20 21 21 /1 Jeans Output (Patre per Day) 0 0 0 44 50 78 92 21 0 34 46 50 52 73 78 Suppose a firm has three sewing machines and can vary only the amount of labor input. Instructions: Enter your responses as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. a. Compute the marginal physical product. 50 48 72 83 86 Labor Input (Workers per Day) 2 5 3 4 Jeans Output (Paire per Day) 83 92 73 94 c. Is total output still increasing when MPP begins to diminish? 6 d. What is the value of MPP when output no longer increases? 0 51 81 99 101 6 7 99 0 51 82 103 104 7 8 103 0 47 80 103 104 b. At what amount of labor input does the law of diminishing returns…arrow_forwardwhat is the importance of long run and short run production in production theory?arrow_forwardThe table below provides information about the cost of inputs and value of output for the production of a road bike. Note there are four different stages of production. Raw materials Rubber for one tire ($25) Aluminum for the frame ($75) Other component materials ($90) Manufacturing Tire maker sells tires for $40 each Frame maker sells bike frame and components for a total of $275 Instructions: Enter your answers as a whole number. a. What value is added by the supplier of the raw materials? $ b. What value is added by the tire maker? $ c. What value is added by the maker of the frame and components? $ d. What value is added by the bike mechanic? $ e. What value is added by the bike store? $| f. What is the total contribution of the bike to GDP? $ Construction Bike mechanic puts everything together and sells the bike for $375 Sale by the retailer Retailer sells the bike for $600arrow_forward
- Homework (Ch 13) Douglas Fur is a small manufacturer of fake-fur boots in Houston. The following table shows the company's total cost of production at various production quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost Fixed Cost (Pairs) (Dollars) (Dollars) (Dollars) 0 78°F Sunny 1 2 3 4 5 6 60 155 220 255 300 350 450 2 On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $155, so you should start your ATC curve by placing a green point at (1, 155). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $95, so you should…arrow_forwardIn the following table, complete the marginal cost, average variable cost, and average total cost columns. Quantity Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost (Vats of juice) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 30 1 35 15 45 3 30 60 50 80 75 105 105 135 On the following graph, use the orange points (square symbol) to plot the marginal-cost curve for Jane's Juice Bar. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 vat of juice to 2 vats of juice is $5, then you would plot a point at (1.5, 5).) Then use the purple points (diamond symbol) to plot the average-variable cost curve starting at 1 vat of juice, and use the green points (triangle symbol) to plot the average-total-cost curve also starting at 1 vat of juice. MAAAAarrow_forwardA commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught: Hours Quantity of Fish (in pounds) 0 hours 0 lb. 1 10 2 18 3 24 4 28 5 30 What is the marginal product of each hour spent fishing? Use these data to graph the fisherman’s production function. Explain its shape. The fisherman has a fixed cost of $10 (his pole). The opportunity cost of his time is $5 per hour. Graph the fisherman’s total-cost curve. Explain its shape.arrow_forward
- Fill out the entries in the table below. Quantity Total Cost Fixed Cost Variable Cost Average Total Cost Average Variable Cost Marginal Cost 0 1 $27.00 $9.00 2 $16.00 3 $5.00 4 $5.50 5 $8.40arrow_forwardExplain how input, output and cost are interrelatedarrow_forwardPicture Tools 16285711986112063eel9ba0 69816244 (Read Only Sman References Mailings Review View Format Picture Shape Y Bring to Fre Picture Border Send to Bac Position Picture Effects Text Wrappr Picture Styles Arrange 2. 6 Question 2. 1. Widget factory Inc. in Wisconsin has the following production function: F(L,K) = 2L/2 K/2 L represent the number of labour hours. Workers at this factory are paid an hourly wage of $30 and they rent capital at $25/hour. Since this is a competitive market, the factory output the factory gets per is output is $50 per unit. Let's pretend the firm operates in the short run with capital fixed at 900, how many factory workers would Widget Factory Inc employ? What is their profit rate? Question 3.arrow_forward
- The following table depicts the number of grapes that can be picked in an hour with varying amounts of labor: Number of pickers (per hour) 1 2 3 4 5 6 7 8Output of grapes (in flats) 10 28 43 54 61 64 65 61Calculate marginal physical product (MPP) and then graph the total product (output) and MPP curves.arrow_forwardThe graph below represents the extraction costs that Slippery Slope Oil Company faces during its first year. Assume the firm is operating on curve 'Total costo,' as shown by the graph. $200 Tools $180 Total cost $160 Total cost1 Total cost $140 $120 Price $100 $80 $60 $40 $20 250 500 750 1000 1250 1500 First-year quantity extracted (millions of barrels) Dollarsarrow_forwardQuestion 8 of 13 The following diagram depicts the production function of the farmers, where diminishing average product of labour is assumed. At A the average product of labour is 500,000/800 = 625 kg of grain per farmer. At B the average product of labour is 732,000/1,600 = 458 kg of grain per farmer. If you know that for 2,800 farmers the grain output is 894,000kg, then which of the following is/are correct? Kilogrammes of grain produced (thousands) 900 800- 700- 600- 500 400- 300- 200- 100- 0 0 400 800 B 1,200 1,600 Number of farmers 2,000 2,400 2,800 OA. The average product of labour when the labour input is 2,800 is 300. OB. The decreasing slopes of the rays from the origin to the production function along the curve indicate the decreasing average product of labour. OC. If the production function curve is an upward-sloping straight line, then there is no diminishing average product of labour. OD. It is possible that initially there is an economy of scale: for example, going from…arrow_forward
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning