Find the best production equation to estimate total output

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Economic Assignment

John works 40 hours a week managing his own business, without drawing a salary. He could be earning $600 a week doing the same job for his former employer. He has invested $100,000 of his own money in his business and owes the bank $100,000. The interest on his bank debt is $200 a week. If John's accounting profit is $1,000 per week, what is his economic profit?

• Consider the production schedule below. Where is the average product of labor maximized and at what point does diminishing marginal product of labor set in?

• Using regression analysis, where labor is the "X" variable, find the best production equation to estimate total output.

output 

labor 

0

0

6

1

16

2

29

3

44

4

55

5

60

6

62

7

62

8

61

9

59

10

 

 

Reference no: EM131377020

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