Consider the following statements: If the marginal product of capital is substantially higher than the marginal...
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Consider the following statements:
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If the marginal product of capital is substantially higher than the marginal product of
labor, the isoquants are relatively steep when labor is on the horizontal axis and capital is
on the vertical axis.
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Diminishing MRTS means a firm must add increasing amounts of labor in order to give
up each additional unit of capital while maintaining output.
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Only I is false
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Only II is false
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Both I and II are false
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Neither I nor II is false
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Homework Answers
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Consider the following statements:
If the marginal product of capital is substantially higher than
the marginal...
4. Consider the production functions given below: a. Suppose that the production function faced by a...
4. Consider the production functions given below: a. Suppose that the production function faced by a milk producer is given by Q = 40.5 20.5 = 4VK VL, where MPx = 2K-0.5 20.5 = 2 and MP, = 2 K0.5L-05 = 2 * i. Do both labor and capital display diminishing marginal products in the short run? ii. Find the marginal rate of technical substitution for this production function. (Hint: The MRTS = 1) iii. Does this production function display...
QUESTION 34 The MRTS of labor for capital tends to be higher the larger the quantity of capital already employed...
QUESTION 34 The MRTS of labor for capital tends to be higher the larger the quantity of capital already employed the lower the quantity of capital already employed when a firm is choosing baskets that are inefficient in the short run compared to the long run QUESTION 35 The object of diversification is to reduce risk and fluctuations in income. to reduce risk, but not to reduce fluctuations in income. to reduce fluctuations in income, but not to reduce risk....
capital and more labor. Clear my choice mation ag question se the graph below for the...
capital and more labor. Clear my choice mation ag question se the graph below for the following three questions: 14 12 10 8 Units of capital, K B 4 2 C IQ2 IQ1 0 0 10 20 30 60 40 50 Units of labor, L 70 80 90 Type here to search The graph shows units of labor (labeled L) on the horizontal axis, and units of capital (labeled K) on the vertical axis. A budget line intersects the vertical/capital...
Multiple choice question The explanation for this problem will require some algebra. Consider the effects of...
Multiple choice question The explanation for this problem will require some algebra. Consider the effects of the following changes in product prices and money income on Perry's welfare: I. A sales tax of 25 percent on goods X and Y, the only two goods in the economy. II. A 20 percent tax on income. Choosing between the two budget lines, Perry would prefer a. I b. II c. I, only if Perry's indifference curves are relatively steep with respect to...
28) The law of diminishing returns, as it applies to labor, means that A) the marginal...
28) The law of diminishing returns, as it applies to labor, means that A) the marginal product of labor will eventually be a horizontal line at zero. B) the average product of labor starts to decline before the marginal product of labor. C) total output eventually decreases. D) the average product of labor increases at a decreasing rate. E) the marginal product of labor eventually decreases as more labor is added with capital held fixed. 29) A firm's short-run labor...
Which of the following statements is false? a. When the marginal product of labor is increasing,...
Which of the following statements is false? a. When the marginal product of labor is increasing, marginal cost is also increasing. b. The average fixed cost curve is downward sloping and approaches the horizontal axis as output increases. c. The marginal cost curve intersects the average variable cost curve at the minimum point of the average variable cost curved. d. When the marginal cost is greater than the average total cost, the average total cost must be increasing. please explain...
Use the graph below for the following three questions: On 14 12 10 oc Units of...
Use the graph below for the following three questions: On 14 12 10 oc Units of capital, K A G B 4 102 2 1Q1 10 20 30 GO 70 80 40 50 Units ollabor, The graph shows units of labor (labeled L) on the horizontal axis, and units of capital (labeled K) on the vertical axis. A budget line intersects the vertical/capital axis at 10 units, and the horizontal/labor axis at 80 units. Two isoquants are drawn: the first...
Assume the budget line is Y = 500 = pBB + pZZ = 5B + 10Z....
Assume the budget line is Y = 500 = pBB + pZZ = 5B + 10Z. Further assume that the marginal rate of substitution = MRS = -MUZ/MUB = -3B/Z. With burritos (B) on the vertical axis and pizza (Z) on the horizontal axis, the marginal rate of transformation, MRT, is equal to In equilibrium, where MRT = MRS, what is the ratio of burrito consumption to pizza consumption? Assuming the entire budget is spent on pizza and burritos, how...
Please show as much work and explanation as possible, thank you so much! Part 2: For...
Please show as much work and
explanation as possible, thank you so much!
Part 2: For each question below, select all answers that are correct (there may be more than one correct answer, there may be none). Each potential answer is worth 2 points. MPK then we can conclude that: PK MPL 1. If PL (a) The firm should use more capital (K) and less labor (L) (b) The firm is not operating on its Long Run Average Cost Curve....
2) MRTS or Marginal rate of technical substitution (MRTS) for an isoquant is defined as Δ...
2) MRTS or Marginal rate of technical substitution (MRTS) for an isoquant is defined as Δ capital / Δ labor, which in turn means that, MRTS will be of higher value when labor is more productive than capital. Select one: True False 3) Regression techniques could involve the issue of 'heteroscedasticity' meaning unequal scatter. This issue is important only when regression is used for demand estimation and not when we use the technique for demand forecasting. Select one: True False...
4. Consider the production functions given below: a. Suppose that the production function faced by a milk producer is given by Q = 40.5 20.5 = 4VK VL, where MPx = 2K-0.5 20.5 = 2 and MP, = 2 K0.5L-05 = 2 * i. Do both labor and capital display diminishing marginal products in the short run? ii. Find the marginal rate of technical substitution for this production function. (Hint: The MRTS = 1) iii. Does this production function display...
capital and more labor. Clear my choice mation ag question se the graph below for the following three questions: 14 12 10 8 Units of capital, K B 4 2 C IQ2 IQ1 0 0 10 20 30 60 40 50 Units of labor, L 70 80 90 Type here to search The graph shows units of labor (labeled L) on the horizontal axis, and units of capital (labeled K) on the vertical axis. A budget line intersects the vertical/capital...
28) The law of diminishing returns, as it applies to labor, means that A) the marginal product of labor will eventually be a horizontal line at zero. B) the average product of labor starts to decline before the marginal product of labor. C) total output eventually decreases. D) the average product of labor increases at a decreasing rate. E) the marginal product of labor eventually decreases as more labor is added with capital held fixed. 29) A firm's short-run labor...
Use the graph below for the following three questions: On 14 12 10 oc Units of capital, K A G B 4 102 2 1Q1 10 20 30 GO 70 80 40 50 Units ollabor, The graph shows units of labor (labeled L) on the horizontal axis, and units of capital (labeled K) on the vertical axis. A budget line intersects the vertical/capital axis at 10 units, and the horizontal/labor axis at 80 units. Two isoquants are drawn: the first...
Please show as much work and
explanation as possible, thank you so much!
Part 2: For each question below, select all answers that are correct (there may be more than one correct answer, there may be none). Each potential answer is worth 2 points. MPK then we can conclude that: PK MPL 1. If PL (a) The firm should use more capital (K) and less labor (L) (b) The firm is not operating on its Long Run Average Cost Curve....
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