1. Business
  2. Economics
  3. 1 if your average physical product app is equal to...

Question: 1 if your average physical product app is equal to...

Question details

1. If your average physical product (APP) is equal to 8 using 6 inputs, what do you expect to happen to your current APP when your marginal physical product (MPP) is 14 when you move to 12 inputs? What is your new APP given this new MPP? Please show how you found your answer. (15 points) Please explain how you decide what level of outputs you produce given a fixed level of an input. Show this on a graph. (5 points) 2. 3. Suppose your goal this year is to produce 34,300 bushels of organic corn. Suppose your production technology has the following relationship for producing bushels of corn Q f(L,T) LT where Q is the number of bushels of corn you produce, L is the number of labor hours you utilize, and T is the number of tractor hours you utilize. You know that the cost per hour of labor is $14 and the cost per hour of tractor time is $98. Assume that you are a cost minimizing producer. a) How much money will you need to ask from your banker to achieve your goal? (Note: when given your particular production function, the optimal amount of input formulas are L-ob and T, where pu is the cost of labor and pr is the cost of tractor time.) (5 points) Pl Pr b) Please sketch a graph of this solution. Include the isoquant and iso-cost line. (10 points) 4. Solve x2 as a function of xi: (5 Points) a) 9x12 x224x13 x23/5
Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution