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1. The production function of a small firm that produces t-shirts is given by the table below. 0 46 8 10 12 14 16 18 20 22 24 09 18 33 57 72 84 93 99 L 102 102 99 A. For each L, solve for AP and MP. Round-up your answers to two decimals. Represent your answers on a table. No need to show the solutions. B. What would be the output elasticities of labor? Round-up your answers to two decimals. If the firm is hiring 16 and 12 workers, interpret the computed & values. C. Identify the range of number of laborers under increasing marginal returns, diminishing marginal returns, and negative marginal returns.

1. The production function of a small firm that produces t-shirts is given by the table below. 0 46 8 10 12 14 16 18 20 22 24 09 18 33 57 72 84 93 99 L 102 102 99 A. For each L, solve for AP and MP. Round-up your answers to two decimals. Represent your answers on a table. No need to show the solutions. B. What would be the output elasticities of labor? Round-up your answers to two decimals. If the firm is hiring 16 and 12 workers, interpret the computed & values. C. Identify the range of number of laborers under increasing marginal returns, diminishing marginal returns, and negative marginal returns.

Microeconomic Theory
Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter2: Mathematics For Microeconomics
Section: Chapter Questions
Problem 2.6P
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1. The production function of a small firm that produces t-shirts is given by the table below. 0|4 6 8| 10 | 12 | 14 09 18 33 57 72 84 | 93 | 99 | 102 | 102 99 L | 16 | 18 | 20 22 24 A. For each L, solve for AP and MP. Round-up your answers to two decimals. Represent your answers on a table. No need to show the solutions. B. What would be the output elasticities of labor? Round-up your answers to two decimals. If the firm is hiring 16 and 12 workers, interpret the computed ɛ, values. C. Identify the range of number of laborers under increasing marginal returns, diminishing marginal returns, and negative marginal returns. D. Explain why the firm experiences diminishing marginal returns. E. If the firm sells each t-shirt for P75 and each worker receives a wage of P450 per day, what is the optimal number of laborers to hire to maximize profits?
Transcribed Image Text:1. The production function of a small firm that produces t-shirts is given by the table below. 0|4 6 8| 10 | 12 | 14 09 18 33 57 72 84 | 93 | 99 | 102 | 102 99 L | 16 | 18 | 20 22 24 A. For each L, solve for AP and MP. Round-up your answers to two decimals. Represent your answers on a table. No need to show the solutions. B. What would be the output elasticities of labor? Round-up your answers to two decimals. If the firm is hiring 16 and 12 workers, interpret the computed ɛ, values. C. Identify the range of number of laborers under increasing marginal returns, diminishing marginal returns, and negative marginal returns. D. Explain why the firm experiences diminishing marginal returns. E. If the firm sells each t-shirt for P75 and each worker receives a wage of P450 per day, what is the optimal number of laborers to hire to maximize profits?
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