Yea, while were at it, help your boy with his econ homework.
Production Function Lab
1. Given the Cobb-Douglas Production function: 15 K^0.4 L^0.7
a. Enter data in Excel and plot the surface.
b. For a fixed value of K (choose something in the middle), compute and draw
the marginal product and average product functions.
c. What are the returns to scale for this function?
2. Given the CES Production function: 5 [0.6 K^-2 + 0.2 L^-2]^-1/2
a. Enter data in Excel and plot the surface.
b. For a fixed value of K (choose something in the middle), compute and draw
the marginal product and average product functions.
c. What are the returns to scale for this function?
3. Use the data on p. 202 to estimate the Cobb-Douglas production function. Note that
you can use the log function to simplify the Cobb-Douglas function to:
log(Q) = log(b0) + b1 log(K) + b2 log(L)
4. For the Cost curve defined by: 4Q2 + 27Q + 400
a. Use Excel to create a spreadsheet table for Q, TFC, TVC, TC, AFC, AVC, AC,
and MC for values of Q from 0 through 15. Compute MC by differences and
exactly using the derivative.
b. Plot the total curves.
c. Plot the average and marginal cost curves.
5. Use the Cobb-Douglas production function from the Production lab to estimate
short-run cost curves. Fix capital at some midpoint value and assume that capital
costs $200 per unit. Assume that labor costs $32 per unit.