Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Elements of Electromagnetics

Authors: Matthew

3rd Edition

019513477X, 978-0195134773

Students also viewed these Economics questions