The Following Table Gives the Quantities of Output That Can

question 19

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 = 4 as K varies from 1 unit to 5 units.
c. Compute the marginal product and average product of labor for K = 1 as L varies from 1 unit to 5 units.
d. Suppose the firm is producing 376 units of output using 1 units of capital and 4 units of labor. The cost of one unit of capital is $39.50 and the cost of one unit of labor is $11.00. Is the firm using a least cost combination of inputs? Why or why not?

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Definitions:

Married People

Individuals who are in a legally recognized union or partnership with another person.

Unmarried People

Individuals who are not currently married or part of a marital union, including those who are single, divorced, or widowed.

Random Assignment

A method used in experiments in which participants are allocated to different groups purely by chance, minimizing biases and ensuring the groups are equivalent at the start of the experiment.

Dependent Variable

In an experiment, it is the outcome or response that is measured to assess the effect of the independent variable.