The Following Table Summarizes the Short-Run Production Function for Your

question 8

Essay

The following table summarizes the short-run production function for your firm.Your product sells for $5 per unit,labor costs $5 per unit,and the rental price of capital is $20 per unit.Complete the following table,and then answer the accompanying questions.
$\begin{array}{|l|l|l|l|l|l|l|}\hline(1) & (2) & (3) & (4) & (5) & (6) & (7) \\\hline K & L & Q & M P_{K} & A P_{K} & A P_{L} & V M P_{K} \\\hline 0 & 5 & 0 & & & & \\\hline 1 & 5 & 10 & & & & \\\hline 2 & 5 & 30 & & & & \\\hline 3 & 5 & 60 & & & & \\\hline 4 & 5 & 80 & & & & \\\hline 5 & 5 & 90 & & & & \\\hline 6 & 5 & 95 & & & & \\\hline 7 & 5 & 95 & & & & \\\hline 8 & 5 & 90 & & & & \\\hline 9 & 5 & 80 & & & & \\\hline 10 & 5 & 60 & & & & \\\hline 11 & 5 & 30 & & & & \\\hline\end{array}$ a.Which inputs are fixed inputs?
Which are the variable inputs?
b.How much are your fixed costs?
c.What is the variable cost of producing 20 units of output?
d.How many units of the variable input should be used to maximize profits?
e.What are your maximum profits?
f.Over what range of variable input usage do increasing marginal returns exist?
g.Over what range of variable input usage do decreasing marginal returns exist?
h.Over what range of variable input usage do negative marginal returns exist?

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Definitions:

Silk

A natural fiber known for its luster and softness, produced by the larvae of silk moths, used in the manufacture of luxurious fabrics.

Price Taker

A firm or individual who accepts the prevailing prices in the market since they do not have the power to influence it.

Small Country

A nation with a smaller geographic area or population, often with less impact on global economic trends.

International Trade

Conducting transactions of goods and services over the boundaries of nations or territories.