Question: The production function for the automotive and parts industry is
The production function for the automotive and parts industry is q = L0.27 K0.16 M0.61, where M is energy and materials (based on Klein, 2003). What kind of returns to scale does this production function exhibit? What is the marginal product of materials?
Answer to relevant QuestionsDoes it follow that because we observe that the aver-age product of labor is higher for Firm 1 than for Firm 2, Firm 1 is more productive in the sense that it can produce more output from a given amount of inputs? Why?Michelle’s business produces ceramic cups using labor, clay, and a kiln. She produces cups using a fixed proportion of labor and clay, but regardless of how many cups she produces, she uses only one kiln. She can ...There are certain fixed costs when you own a plane,’ [Andre] Agassi explained during a break in the action at the Volvo/ San Francisco tennis tournament, ‘ so the more you fly it, the more economic sense it makes. . . . ...The invention of a new machine serves as a mobile station for receiving and accumulating packed flats of strawberries close to where they are picked, reducing workers’ time and burden of carrying full flats of ...In the Mini-Case “Learning by Drilling,” an oil drilling firm’s average cost when working with production company M depends partly on its own cumulative drilling experience, N, and partly on the cumulative amount of ...
Post your question