The Following Table Gives the Quantities of Output That Can

question 5

Essay

The following table gives the quantities of output that can be produced with different amounts of capital and labor utilized by a firm.

a. What are the returns to scale for this firm over the range of capital and labor shown on the table? Why?
b. Compute the marginal product and average product of capital for L = 2 as K varies from 1 unit to 5 units.
c. Compute the marginal product and average product of labor for K = 3 as L varies from 1 unit to 5 units.
d. Suppose the firm is producing 230 units of output using 3 units of capital and 2 units of labor. The cost of one unit of capital is $100 and the cost of one unit of labor is $5. Is the firm using a least cost combination of inputs? Why or why not?

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Definitions:

Positive Reinforcement

Positive reinforcement strengthens a behavior by making a desirable consequence contingent on its occurrence.

Successive Approximations

A technique in behavior modification where desired behaviors are gradually learned through a series of steps that get closer to the target behavior.

Positive Reinforcement

A method of encouraging desired behavior by rewarding it, thus increasing the likelihood of the behavior being repeated.

OB Mod

Organizational Behavior Modification, a theory that focuses on influencing individual or group behaviors within an organization through a system of rewards and punishments.