Question
Nobody fixes more fender benders than Crazy Bob! At his auto body shop, the production function showing the number of cars repaired each year is
Nobody fixes more fender benders than Crazy Bob! At his auto body shop, the production function showing the number of cars repaired each year is Q=100(KL)where K is the number of arc welding machines available and L is the number of employees. Currently, K is fixed at 9.
a.Make an equation for Crazy Bob's short-run production function, showing output as a function of labor only.
b.Calculate the total number of cars Bob can repair each year for L=1,2,3,4and 5.
c.Calculate the marginal product of labor for each of Bob's first five workers. Does the MPL diminish?
d.Calculate the average product of labor for Bob's first five workers. Is the MPL greater than, equal to, or less than the APL at each level of employment? Why?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started