RHODES UNIVERSITY DEPARTMENT OF ECONOMICS AND ECONOMIC HISTORY MICROECONOMICS 201 Tutorial Exercise for 08/10/21 Question 1 Chapters 6 and 7 Wheat is produced according to the production function: q = 1001(0-5H0-s Where q = quantity of wheat produced; K = capital input; H = labour input (i) If the capital input of 16 units and a labour input of 25 units are used, show your working in answering the following: (a) what is the marginal product of labour? (b) what is the marginal product of capital? (ii) If the cost of capital (1') is R200 per unit, the cost of labour (w) is R150 per unit, and the units of capital and labour are as in part (i) above, show a_ll your working in answering the following: (a) what is the total cost of production? (b) what is the average cost of producing q units of wheat? uestion 2 Cha ter 7 (i) Imagine that the wage rate (w) = 10 and cost of capital (1') = 0.1. Given this information, answer the following questions: (a) Find the slope of the isocost line. (b) What is the slope of the isoquant where it is tangent to this isocost line? (c) If the marginal product of labour used in production at this point is 50 pencils per hour, what is the marginal product of capital used? (ii) Zemaleck is a company which produces fabrics. The wage rate (w) is RIOO/hour; cost of capital (1') is 0.1 ; the machinery used is worth R20 000 and 20units of labour are used. Showing all working: (a) Find the total cost of production. (b) If 20 rolls of fabric are produced, what is the average cost of production