Short-Run Production Possibilities

(a) The traditional distinction economists make between short-run and long-run production decisions is that in the long run, all inputs are variable, whereas, in the short run, some inputs are fixed. In the grid if the amount of capital were to be fixed at 2 units. Based on the numbers provided use excel to set up two diagrams (a.k.a. Excel charts): the first one showing the firm's short-run production curve and the second one showing its short-run marginal production curve. Note that in both of these charts you should have the amount of labor on the horizontal axis. Also, keep in mind that when you graph marginal values (such as a marginal product) since marginal values are calculated over a range, in your diagrams you should put the marginal value in the middle of the horizontal range that they are calculated over.

(b) Include an explanation about the relationship and the difference between the short-run and the long-run decisions made by the firm.

Capital
Labor	0	1	2	3	4	5	6	7	8
0	0	0	0	0	0	0	0	0	0
1	0	1	3	7	12	18	21	23	24
2	0	3	12	30	60	85	105	120	130
3	0	7	30	85	105	120	150	180	210
4	0	12	60	105	130	210	280	340	380
5	0	18	85	120	210	410	500	570	620
6	0	21	105	150	280	500	700	850	950
7	0	23	120	180	340	570	850	1100	1300
8	0	24	130	210	380	620	950	1300	1500
9	0	24	135	230	410	660	1000	1400	1600