True or false? Explain. It is possible to have decreasing marginal products for all inputs, and...
True or false? Explain. It is possible to have decreasing marginal products for all inputs, and yet have increasing returns to scale
Homework Answers
The answer is True
Reducing marginal returns is a short-term effect of increasing
input while at least one variable of production, such as labor or
capital, remains constant.
Return to scale is a long-term effect of increasing input in all
production variables.
If production units are removed, the impact on production for the
first few units is minimal and can result in substantial cost
savings if this law is reversed.
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True or false? Explain. It is possible to have decreasing marginal products for all inputs, and...
The production function q = k0.620.5 exhibits: a. increasing returns to scale and diminishing marginal products...
The production function q = k0.620.5 exhibits: a. increasing returns to scale and diminishing marginal products for both k and 1. b. increasing returns to scale and diminishing marginal product for 1 only. c. increasing returns to scale but no diminishing marginal productivities. d. decreasing returns to scale.
a-d the following statements are true or false, and explain why (a) If the production funetion...
a-d
the following statements are true or false, and explain why (a) If the production funetion has decreasing returns to scale, then the average cost function decreases. (b) The l adding ong run market supply curve in a perfectly competitive market is formed by up individual supply curves in the industry (c) The marginal cost function is minimized when the average cost function crosses the marginal cost function. (d) For a market to be perfectly competitive, different firms must sell...
Question-3 (Marginal Products and Returns to Scale) (30 points) Suppose the production function is Cobb-Douglas and...
Question-3 (Marginal Products and Returns to Scale) (30 points)
Suppose the production function is Cobb-Douglas and f(x1; x2) =
x1^1/2 x2^3/2
1. Write an expression for the marginal product of x1.
2. Does marginal product of x1 increase for small increases in
x1, holding x2 fixed? Explain
3. Does an increase in the amount of x2 lead to decrease in the
marginal product of x1? Explain
4. What is the technical rate of substitution between x2 and
x1?
5. What...
True or False & why: If you can increase production 10% by increasing all inputs by 20% the production process exh...
True or False & why: If you can increase production 10% by increasing all inputs by 20% the production process exhibits diminishing marginal productivity
Use the production function:Y=K^(3/4)*L^(3/4) to Show that marginal product is decreasing for both capital and labor(5pts),...
Use the production function:Y=K^(3/4)*L^(3/4) to Show that marginal product is decreasing for both capital and labor(5pts), yet there are increasing returns to scale(5pts).
In a production process, all inputs are increased by 10%; but output increases less than 10%....
In a production process, all inputs are increased by 10%; but output increases less than 10%. This means that the firm experiences A) decreasing returns to scale. B) constant returns to scale. C) increasing returns to scale. D) negative returns to scale
The production function 9 = k1.270.5 exhibits: a. increasing returns to scale but no diminishing marginal...
The production function 9 = k1.270.5 exhibits: a. increasing returns to scale but no diminishing marginal productivities. b. decreasing returns to scale. C. increasing returns to scale and diminishing marginal product for / only. d. increasing returns to scale and diminishing marginal products for both k and I.
1 pts In a production process, all inputs are increased by 10%; but output increases less...
1 pts In a production process, all inputs are increased by 10%; but output increases less than 10%. This means that the firm experiences: o negative returns to scale. o decreasing returns to scale. O constant returns to scale. o increasing returns to scale.
Be thorough and concise. If possible, include a graphical explanation as well as verba True/False/Uncertain. You...
Be thorough and concise. If possible, include a graphical explanation as well as verba True/False/Uncertain. You must provide a proof for your answer. (20 points) 1. The supply curve of labor may be upward sloping, downward sloping or both- it depends on the relative size of substitution and income effects. The demand curve for labor is derived from the marginal product of labor curve- the portion that is subject to increasing returns to labor, due to specialization and division of...
3) Consider the production function ? = 6? 0.3? 0.6 . The marginal products are ???...
3) Consider the production function ? = 6? 0.3? 0.6 . The marginal products are ??? = 1.8? −0.7? 0.6 and ??? = 3.6? 0.3? −0.4 . a. In the short run assume that capital is fixed at ? = 10. Derive formulas for the short-run Total Product (TP), Average Product (APL), and Marginal Product (MPL). Graph these three functions. b. In the long run, capital is not fixed. Graph the isoquant for ? = 6. Identify and label three...
The production function q = k0.620.5 exhibits: a. increasing returns to scale and diminishing marginal products for both k and 1. b. increasing returns to scale and diminishing marginal product for 1 only. c. increasing returns to scale but no diminishing marginal productivities. d. decreasing returns to scale.
a-d
the following statements are true or false, and explain why (a) If the production funetion has decreasing returns to scale, then the average cost function decreases. (b) The l adding ong run market supply curve in a perfectly competitive market is formed by up individual supply curves in the industry (c) The marginal cost function is minimized when the average cost function crosses the marginal cost function. (d) For a market to be perfectly competitive, different firms must sell...
Question-3 (Marginal Products and Returns to Scale) (30 points)
Suppose the production function is Cobb-Douglas and f(x1; x2) =
x1^1/2 x2^3/2
1. Write an expression for the marginal product of x1.
2. Does marginal product of x1 increase for small increases in
x1, holding x2 fixed? Explain
3. Does an increase in the amount of x2 lead to decrease in the
marginal product of x1? Explain
4. What is the technical rate of substitution between x2 and
x1?
5. What...
The production function 9 = k1.270.5 exhibits: a. increasing returns to scale but no diminishing marginal productivities. b. decreasing returns to scale. C. increasing returns to scale and diminishing marginal product for / only. d. increasing returns to scale and diminishing marginal products for both k and I.
1 pts In a production process, all inputs are increased by 10%; but output increases less than 10%. This means that the firm experiences: o negative returns to scale. o decreasing returns to scale. O constant returns to scale. o increasing returns to scale.
Be thorough and concise. If possible, include a graphical explanation as well as verba True/False/Uncertain. You must provide a proof for your answer. (20 points) 1. The supply curve of labor may be upward sloping, downward sloping or both- it depends on the relative size of substitution and income effects. The demand curve for labor is derived from the marginal product of labor curve- the portion that is subject to increasing returns to labor, due to specialization and division of...
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