Can anyone help me with 12-14 (14) The \"decision rule\" Peterson (and you!) are

Question

Can anyone help me with 12-14

(14) The "decision rule" Peterson (and you!) are using is similar to (a) MUA-MUB (b) MR MC (e) MRP-MFC Note: MU "marginal utility", MR "marginal revenue", MC "marginal cost" P "price, MRP "marginal revenue product",MFC-marginal factor cost" and"x is the multiplication sign. A machine shop produces a certain metal part. It uses equipment "capital") and labor in its production process. The table below shows an "excerpt from its production function which describes this process. Use it to answer the following three (3) questions How to read the table: Columns represent units of capital ("K") and rows represent units of labor (L) Example: When the machine shop employs 3 units of labor (Row 3) and 2 units of capital (Column 2) the resulting output is 260 units, shown at the intersection of Row 3 and Column 4 1 162 176 3 204 260 300 332 359 5 285 363 418 462 500 (15) The production process exhibits the law of diminishing marginal returns to labor 100 127 147 2 | 157 | 200 | 230 | 255 | 276 43 because: (a) Output increases faster when units of capital are added compared to (b) When both capital and labor are added in the same proportions the (e) The capital-labor ratio increases as more labor is employed units of labor. increase in output slows down after a while. When the capital input is kept fixed, the marginal product of the other input (labor) decreases as more of it is employed When the capital input is kept fixed, the marginal product of the other input (labor) remains the same as more of it is employed. (d) (e)

Explanation / Answer

12) Ans is D. Because marginal exposure from last dollar from both is same which is optimum condition

13)ans is C. total exposure=85000+130000=215000

14)ans is D. MUa/Pa=MUb/Pb this is also known as law of equi marginal utility

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