Question: I would like help understanding how to answer this question, it was seen in class and I'm confused how my teacher got the answers, thank

I would like help understanding how to answer this question, it was seen in class and I'm confused how my teacher got the answers, thank you in advance!

Assume that the production function for the removal of atmospheric carbon is as follows:

Q = MN - 0.8M2 - 0.2N2, where M= human-made capital and N= natural capital.

a) Re-write the production function given a level of human-made capital of 10 units. Find its maximum point. Then, find the average natural capital productivity (APN). Find where the APN reaches maximum.

b) Find the marginal productivity of natural capital (MPN). At what value of N is MPN zero?

c) Graph the production function and label of its maximum point of output. On a separate graph, draw the MPN and the APN functions as functions of natural capital. Label point (Value of N) for which APN is at its maximum.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!