Solutions to Homework Assignment 3 (Chapter 5).doc

SolutionstoHomeworkAssignment3(Chapter5). Decreasing . . Increasing . . Constant . . binationofinputs:MPl/Pl=MPk/Pk 2/9=.22<.33=10/30. Rentthebackhoe,asthecontractorwouldgetmoredirtmovedper . Ifonlylaborisused:TCl=300x9=2,700. Usingbackhoewouldrequire600/10=60hour/8=8days,sinceitcan berentedforfull8-,ifonlybackhoeisused: TCk=30x64=1,,. Inputa APa MPa 0 - - 10 20 20 20 30 40 30 40 60 50 30 . . 30unitsand20unitsofinputa,. Immediatelyafterinputa=. UnitsofL TPl APl ArcMPl 1 40 40 - 2 80 40 40 3 120 40 40 4 160 40 40 5 200 40 40 6 240 40 . MPk/Pk=30/30=1unitofoutputper$1. MPl/Pl=40/10=4unitsofoutputper$1. No,theadditionaloutputperadditional$. 2unitsofcapitaland6unitsoflaboratTC=. Increasingifallinputsareincreasedbyacertainpercentage,output . Increases:capitalandlaborareimperfectsubstitutes,somorecapital . FONC:MPz=dQ/dZ=160+36Z-Z^2=0,solveformaximizingZ=. ForZ=40,Q=160x40-18x40^2-(1/3)40^3