Author Question: Given the production function Q = 21X + 9X2 - X3, where Q = Output, and X = Input a. At what ... (Read 118 times)

123654777 · **on:** Jul 1, 2018

Given the production function Q = 21X + 9X2 - X3, where Q = Output, and X = Input

a. At what value of X does Stage II of the production function begin?
b. At what value of X does Stage III of the production function begin?
c. At what value of X does diminishing returns set in?

Question 2

What is one reason for the high interest rates for home loans offered to those with low credit ratings?

A) Predatory lending practices
B) Those with lower credit ratings faced a restricted supply of loans, ceteris paribus.
C) Those with lower credit ratings typically demand greater loans, ceteris paribus.
D) Government regulation

johnharpe · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

a. Stage II begins when AP is at a maximum, or X = 4.5
b. Stage III begins where MP = 0, or X = 7 -1 has no meaning
c. diminishing returns set in when MP at a maximum, or dMP/dQ = 0, or X = 3

Answer to Question 2

B