T

1. Q = K + 2L

CCapital 1 2 3 4 5 6 7 8

1

2

3

4

5

6

7

Labor

a) Fill in the production table given above.

b) Draw isoquant maps for any 2 different levels of production on the same graph. (label your graph properly).

2.If the production function is given by ; 20KL

a) Fill in the table given above.

b) Draw the isoquant map.

c) What type of returns to scale does the above production function have? Explain

d) Due to introduction of new technology, the general productivity of this firm has increased. The production functions know is 40KL .

i) Fill in the table as in part (a) if output is 100 and capital remains same.

ii) Demonstrate it graphically.

iii) Is technological progress good or bad? Explain.

3. Q =20(K 1/2 L 2/3)

Q K L

A 100 1

B 100 2

C 100 3

D 100 4

E 100 5

F 100 6

G 100 7

a) Fill in the table given above.

b) Demonstrate graphically that different combinations of capital and labor would give the same production level.

c) Calculate MRTS LKA to C

d) What type of returns to scale does the above production function have? Explain.

Enrichment Activity

1. The production function Q =KL

a) What is the marginal product of L?

b) What is the marginal product of K?

c) What is the marginal rate of technical substitution between L and K?