Question

For the short-run production function in exercise 1, let the wage be $20.
a. Derive AVC (Q).
b. When 160 units are produced, _______ units of labor are employed, and the average product is __________. Average variable cost is $__________.
c. Derive SMC (Q).
d. Using the marginal product (MP) function derived in part c , the marginal product is _______ when 160 units are produced. SMC is $_________. Verify that SMC (Q) evaluated at Q = 4 is identical to calculating SMC by using the ratio w/MP .



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  • CreatedNovember 18, 2014
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