6. Ned's Tuna has the following production function: q=K3/4L¹/4, Where q is the number of tunas per hour, L is the numbe

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6 Ned S Tuna Has The Following Production Function Q K3 4l 4 Where Q Is The Number Of Tunas Per Hour L Is The Numbe 1 (152.76 KiB) Viewed 71 times

6. Ned's Tuna has the following production function: q=K3/4L¹/4, Where q is the number of tunas per hour, L is the number of workers and K is the number of boats. Suppose that w = $20/hour (PL) and r = $30/hour (PK). a. Find Ned's marginal product of labor (MPL). Does it exhibit diminishing marginal returns? b. Find Ned's marginal product of capital (MPK). Does it exhibit diminishing marginal returns? c. Find and draw an isocost function for C = $600/hour. d. Suppose that Ned is stuck with 2 boats in the short run. Find Ned's short-run total cost (TC) function (as a function of q). e. What is Ned's short-run average total cost (ATC) function, average variable cost (AVC) function, and marginal cost (MC) function? f. In the long-run Ned can change the number of boats (that is, both L and K are variable). Find and draw the expansion path for Ned's production function. g. Derive Ned's long-run total cost (LRTC) function (as a function of q). [Note: numbers need not be nice and rounded here]. h. What is Ned's long-run average cost (LRAC) function, and long-run marginal cost (LRMC) function?