Question

A key sector of production for continued prosperity in any given country is energy production. In this problem set, I am asking you to imagine that you are working for an energy company and have been asked to answer questions about their model for energy production. The production of energy uses labor l and energy extracting machinery m. Imagine that the energy company uses the following technology to produce joules of energy: Coal mining a. Imagine that machinery is fixed at 5 units in the short term. Graph several points of the short run production function of coal mining bygrapinabor on the X-axis and output on the Yaxis. Label technically efficient plans and shade the entire technology set. b. Find the marginal physical product of labor for coal mining. Formally show whether the marginal physical product of labor is diminishing. c. Show whether the technology exhibits constant, increasing, or decreasing returns to scale. Formally prove your answer Fracking fe(l, m) l/2m a. Show that fracking does not exhibiting a decreasing marginal product of machinery. b. Show whether fracking exhibits constant, increasing, or decreasing returns to scale in the long run. c. Suppose our energy company is limited to 10 units of machinery in the short run. Our energy company choose between allocating labor between fracking and coal mining. Suppose that fracking can only be used to produce at most 10 joules of energy. After that point, the "hard to reach" resources that fracking excels at tapping have become exhausted. If the company had one worker, would it be more efficient to assign that worker to fracking or coal mining? How do you know? When will the company switch over to start assigning workers to the other technology?

Answer 1

5 ус (4) = 2.25 =낫류 # t>0