question
In the long run
answer
All inputs are variable
question
The short run is defined as that period of time during which
answer
One or more inputs cannot be freely varied
question
If equal amounts of a variable input are sequentially added to the fixed input in a typical production function,
answer
Increments to output will eventually decrease with increase in the variable input
question
The law of diminishing returns to an input says that if other inputs are fixed
answer
Change in output will eventually decrease with increases in the variable input
question
The average product of a variable input
answer
Is defined as the total product divided by the quantity of the variable input
question
Geometrically, the marginal product
answer
At any point is the slope of the total product curve at the point
question
In a short-run production function before diminishing returns set in,
answer
Both MPL and APL will have positive slopes and MPL will lie above APL
question
Say you are the owner of a Pizza place. You know that when you produce 10 pizzas, the average product of each of your workers is 10, and the marginal product of your last worker is 15. From this information you know that:
answer
The average product is increasing
question
When the marginal product curve lies below the average product curve,
answer
The average product curve must be falling
question
The rate at which one input can be exchanged for another without altering output is called
answer
The marginal rate of technical substitution
question
Say you own a Mexican place that produces, among other things, Mexican burritos. Your production of burritos is given by the equation Q = 5K1/2L1/2, where Q is the amount of burritos, K is the amount of capital and L is the amount of labor. How many workers you would need to use in order to minimize the cost of producing 100 burritos when the capital is, K, is 100?
answer
4
question
A production function for which proportional changes in all inputs leads to a less-thanproportional change in output is said to exhibit
answer
Decreasing returns to scale
question
For any constant returns production function, the isoquants for Q = 1, Q = 2, Q = 3, etc. will
answer
Be equally spaced, in that the distance between Q = 1 and Q = 2 is the same as Q = 2 and Q = 3, etc.
question
Returns to scale refers to
answer
What happens to output when all inputs are varied in some proportion
question
On the next exam for this course you can study for a maximum of four hours. If you don't study at all you will get a score of 70. One hour would give you an 80, the second hour increased your score to 89, the third to 92. If you studied the fourth hour your score would be 87. In which hour did diminishing returns set in?
answer
The second because your gain is less than the previous hour
question
Which of the following production functions exhibits decreasing returns to scale?
answer
Q = Kl/4Ll/3
question
Suppose that at a firm's current level of production the marginal product of capital is equal to 10 units, while the marginal rate of technical substitution between capital and labor is 2. Given this, we know the marginal product of labor must be:
answer
20
question
In the production of bicycles an increase of 2 percent in the level of capital and labor respectively will generate an increase of 1 percent in the production of bicycles. From this information we know that the production of bicycles exhibits:
answer
Decreasing returns to scale
question
A daily production function for staplers is Q = 5L- 2L3. Show all your work for the following questions. a) What is the marginal product equation for labor? b) What is the APL function?
answer
a) MPL= 5 - 6L2 b) APL= 5 - 2L2
question
In the production function Q = 10L1/2K1/2calculate the marginal product equations of both inputs
answer
MPL= 5L-1/2K1/2 MPK= 5L½K-1/2
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
