If a production function is given by the equation Q = 12X + 10X2 ...

[elizabeth18]

If a production function is given by the equation Q = 12X + 10X2 - X3, where Q = Output and X = Input, then calculate the equations for
 
  a. average product
  b. marginal product
  c. point of diminishing average returns
  d. point of diminishing marginal returns

Question 2

Probabilities, which are based on past data or experience, are called
 
  A) a priori.
  B) objective.
  C) uncertain.
  D) statistical.

[Li Jun]

Answer to Question 1

a. AP = Q/X, or 12 + 10X - X2
b. MP = dQ/dX, or 12 + 20X - 3X2
c. DAR occurs where AP at a maximum, or dAP/dX = 0, or 10 - 2X = 0, X = 5
d. DMR occurs where MP at a maximum, or dMP/dX = 0, or 20 - 6X = 0, X = 3.33

Answer to Question 2

D