Use the Following Information on a Hypothetical Short-Run Production Function

question 56

Essay

Use the following information on a hypothetical short-run production function to answer questions a-c.
Units of Labor/Day 5 6 7 8 9
Units of Output/Day 120 140 155 165 168
The price of labor is $20 per day. Ten units of capital are used each day, regardless of output level. The price of capital is $50 per unit.
a. Calculate the marginal and average variable product of each unit of labor input.
b. Calculate total, average total, average variable, and marginal costs.
c. Can you tell where diminishing marginal returns sets in?

---

Definitions:

Attitude Components

The cognitive, affective, and behavioral aspects of an attitude that respectively represent beliefs, feelings, and intentions towards an object or issue.

Experiential Hierarchy

The organization of experiences and learnings in a manner where they are structured from the most basic to the most complex.

Low-Involvement Hierarchy

A consumer decision-making process for products or services that are perceived as low risk and have little emotional connection, often involving limited information search and simple evaluation processes.

Behavioural Learning

The process of acquiring new behaviors and knowledge through the interaction with the environment, often involving stimuli and responses.