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 Total product of Marginal product of Average product of

inputs variable input 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?