Q1) The wage rate of labor is Rs. 6 and price of capital is Rs. 2. The marginal product of labor is 16 while marginal product of capital is 4. Can a firm be operating at equilibrium?

Q2) Complete the table and show your calculation

No. of variable inputs Total product Marginal product of Average product of

variable input variable input

3 18 30

4 20

5 130

6 5

7 19.5

Does the production function stated in the table given above exhibit diminishing returns? If so, at what no. of units of variable inputs do diminishing marginal return begin?