Question: Kelso Fruity Frozen Yogurt is a small shop that sells cups of frozen yogurt in Madison.

Kelso owns four frozen-yogurt machines. His other input is labor input (workers he employs)

1. Last month, he tried to estimate his daily production function when he varies the number of workers employed but keeps the number of machines fixed. However, he lost some of the data by accident. He knows you are studying Econ 101 so asks you to recover the lost data in the below table.

   Quantity or labor (workers)	Quantity of frozen yogurt cups	Avg. production of frozen yogurt	Marginal production of frozen yogurt
   0	0	-	-
   1	100
   2			140
   3			180
   4		140
   5	660
   6			60
   7		106
   8		90

2. Draw the total product curve. Put the quantity of labor on the horizontal axis and the quantity of frozen yogurt on the vertical axis.
3. Draw the average product curve and the marginal product curve in the same graph.
   Put the quantity of labor on the horizontal axis and the quantity of average and marginal frozen yogurt production on the vertical axis.
4. If Kelso wants to maximize his total production, how many workers is he supposed to hire?
5. After your estimation, you figure out the Kelso’s estimation of production function might be wrong. Your estimation tells you that the production function of yogurt could be
   Q =50× K × L , L is labor; K is the number of machines. Please rewrite the table
   below. (Fix K=4; 2≈1.4; 3≈1.74;)
   Quantity of Labor
   (Workers) Total Quantity of frozen yogurt (cups) Average production of frozen yogurt Marginal production of frozen yogurt
   0 0 - -
   1
   2
   3
   4
6. . Please draw the isoquant curves of quantity equal to 50,100, 200. Can you tell this production function has increasing returns to scale, decreasing returns to scale or constant

returns to scale?

Price: $2.99

Solution: The downloadable solution consists of 5 pages
Deliverable: Word Document