Use the following information on a hypothetical short-run production function to answer questions a-c.
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:
Bureau of Labor Statistics
A U.S. government agency that collects and disseminates various labor economics statistics, including unemployment and wage data.
Labor Force
The total number of people, both employed and unemployed, who are actively seeking and available for work in the economy.
Labor Force
The total number of people who are employed and those who are actively seeking employment.
Bureau of Labor Statistics
A US government agency that collects, processes, and disseminates essential statistical data on labor economics, including employment, wages, and productivity.
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