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The table below represents the production function for Caia's Sweaters, a small company specializing in custom sweater designs. The number in the cells represents the
The table below represents the production function for Caia's Sweaters, a small company specializing in custom
sweater designs. The number in the cells represents the number of sweaters that can be produced with various
combinations of labor and capital
a In what way is this production function long run?
b A short run production function is part of the long run production function.
Describe a short run production function from the table when is fixed.
Describe a short run production function from the table when is fixed.
c Suppose that Caia's Sweaters employs units of capital and workers. How many sweaters will be produced?
d Suppose that Caia's Sweaters employs units of capital and workers but the owner, Caia Itadori, is considering
adding another worker to the company. What will be the marginal product of the new worker?
e Suppose Caia's Sweaters employs units of capital. Does the short run production function exhibit diminishing
returns with respect to labor? If so when do the diminishing returns "set in Show your work!
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