Economics

The following production grid shows the relationship between capital and labor inputs and the output that can be produced by a firm. 

 

	Capital
Labor	0	1	2	3	4	5	6	7	8
0	0	1	3	6	8	10	12	13	13
1	1	10	30	60	85	105	120	130	135
2	3	30	85	105	120	150	180	210	230
3	6	60	105	130	210	280	340	380	410
4	8	85	120	210	410	500	570	620	660
5	10	105	150	280	500	700	850	950	1000
6	12	120	180	340	570	850	1100	1300	1400
7	13	130	210	380	620	950	1300	1500	1600
8	13	135	230	410	660	1000	1400	1600	1700

 Based on this information use Excel Charts to do the following:

(a) Set up an isoquant map with isoquants representing output levels of 10, 105, and 410 units of output.

(b) Set up a diagram showing the firm's short run production function assuming that the firm has only one unit of capital.

(c) Set up a diagram showing the firm's marginal product schedule assuming that the firm has only one unit of capital.

(d) Assume that capital is fixed at one unit in the short run and that the costs associated with the use of fixed inputs are $30 per period, while the wage rate is $10 per unit of labor per period. Use this information to perform the calculations necessary to set up a diagram showing total cost (TC) and total variable cost (TVC) of the firm per period in the short run.

(e) Also, use the information in part c to then set up another diagram showing the firm's short run marginal cost (MC), average total cost (ATC), and average variable cost (AVC) in the range from 10 to 135 units of output.