Essay
(Table: Capital and Labor XIV) Consider the production function that this table shows. 
a. Does this production function exhibit a constant return to scale? Explain your answer.
b. How many units of output are produced with 4 units of labor and 2 units of capital?
c. Suppose the firm is using 3 units of capital and 2 units of labor and then decides to employ a third worker. What is the marginal product of the third worker?
d. Suppose the firm is using 1 unit of labor and 1 unit of capital. What is the marginal product of capital for K = 2, K = 3, and K = 4? Does return on capital diminish?
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a. The production function exhibits decr...View Answer
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