Four Sector Macroeconomic Model And Equilibrium Level Of Income - Profit Maximizing Level Of Price And Outputs - Economics Assignment Help

Assignment Task -

Question :

a) The average product of labor is defined asLQ 

APL =, where Q is output and L is labor. 

(i) Using rules of differentiation, prove that at a stationary point of the average product  of labor function, MP AP L L 

=, where MPLis the marginal product of labor.  

 ii) Show mathematically and graphically that to the left of the maximum of APL, the  APLfunction is increasing( ) MP AP L L >and to the right of maximum of APL, theAPL function is decreasing( ) MP AP L L <g. [label vertical and horizontal axis] [3 points]  (b) If the total cost (TC) function is given by 

QTC e Q = ,  

(i) find the value of Q which minimizes average cost (AC). 

(ii) Show that at the AC minimizing of Q, the slope of MC > 0.  

(c) (i) What type of economic problem is solved by equating marginal product of labour and  average product of labour? [Multiple choice]

  A.  Maximise output 

 B. Maximise labour productivity 

 C. Maximise profit 

 D. Minimise marginal product of labour 

 E. Minimise average product of labour 

(ii) At the profit maximizing quantity Q, the slope of marginal cost (MC) would be  [Multiple choice]

  A. Equal to the slope of marginal revenue (MR)  

 B. Greater than the slope of marginal revenue (MR)  

 C. Less than the slope of marginal revenue (MR)

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