Question

(a)The manager of automotive and parts industry recently hired an economist to estimate the firm's production function. Based on the economist's report, the manager now knows that the firm's production function is given by = ^0.250.250.50 and that capital K is fixed at 5 unit. Where M is energy and materials.

Required:

(iv)Calculate the average product of labor AND the marginal product of labor when (6 units) of labor and (15 units) of energy are utilized.

(v)Calculate the average product of energy AND the marginal product of energy when (6 units) of labor and (15 units) of energy are utilized.

(vi)Suppose the firm can hire labor at a wage of RM25 per hour and output can be sold at a price of RM5 per unit. Determine the profit-maximizing levels of labor and output when capital and energy are fixed at 5 and 15 units, respectively.