Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 20

In the numerical example of Hamburger Heaven s production function in Chapter 6, we examined the consequences of the invention of a self-flipping burger that changed the production function to
a. Assuming this shift does not change the cost-minimizing expansion path (which requires K = L), how are long-run total, average, and marginal costs affected? (See the numerical example at the end of Chapter 7.)b. More generally, technical progress in hamburger production might be reflected by
where r is the annual rate of technical progress (that is, a rate of increase of 3 percent would have r =.03). How will the year-to-year change in the average cost of a hamburger be related to the value of r?