When production is characterized by diminishing marginal productivity:increasing the amount of one input used means you must use more of another input.None of the answers is correct.unskilled workers are less productive than skilled workers.All Answers are correct.O output must increase with each additional unit of the input used in production.

Diminishing marginal productivity explains that when the input increase by 1 additional unit, then…

When production is characterized by diminishing marginal productivity: O increasing the amount of one input used means you must use more of another input. None of the answers is correct. O unskilled workers are less productive than skilled workers. All Answers are correct. output must increase with each additional unit of the input used in production.

When production is characterized by diminishing marginal productivity: O increasing the amount of one input used means you must use more of another input. None of the answers is correct. O unskilled workers are less productive than skilled workers. All Answers are correct. output must increase with each additional unit of the input used in production.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 10SQ

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A firm's production function is: q = 20L1/2K1/2 where q is the firm's total product, L is the quantity of labor employed, and K is the quantity of capital employed. The price of labor is $25 per unit and the price of capital is $100 per unit. a. What is the equation for the marginal product of labor? b. What is the equation for the marginal product of capital? c. Given the price of labor is $25 per unit and the price of capital is $100 per unit, what is the cost-minimizing combination of capital and labor that can produce 800 units of output?
□ A firm hires two people and output increases by 20 units. The firm adds one more person and output increases by 15 units. Is the firm experiencing diminishing marginal productivity? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. b C Question 12 d No. Output is getting bigger by adding more workers. No. Output per additional worker is getting bigger as the number of workers increases. Yes. The change in output is getting smaller as more workers are hired. Yes. Total output is decreasing as more workers are hired.
A firm produces good Y with just 2 factors: Capital which is fixed in supply and labour which is variable. Identify the stages of production in the diagram and explain why the firm still hire labour even though it is in the range of diminishing returns. What is the number of workers after which diminishing marginal returns starts? Is this a short run or long run phenomenon? Labour (units) 1 2 3 4 5 6 7 8 9 Total Product (TP) in Units 8 15 24 30 35 37 38 38 36 Average Product (AP) in units 8 7.5 8 7.5 7 6.17 5.43 4.75 4 Marginal Product (MP) in units 8 7 9 6 5 2 1 0 -2
Which of the following is incorrect when there is one input (labor) in the production? The production function is concave when law of diminishing marginal product holds. Firms can produce under the total product curve and on the curve but not above the curve. Total product is at the maximum when marginal product of labor is zero. O Marginal product is equal to average product when marginal product is at the maximum.
Does additional input of labor entail a steady increase in the output of a firm? Why or Why not?
What does diminishing marginal product imply? The marginal cost of an extra worker is unchanged. The marginal cost of an extra worker is less than the previous worker's marginal cost. The marginal product of an extra worker is less than the previous worker's marginal product. The marginal product of an extra worker is greater than the previous worker's marginal product.
Macmillan Learning Consider the table, which reports production information for a firm that uses a fixed amount of capital and varying amounts of labor. Use this information to answer the questions. Do not round answers. What is the marginal product of the third worker? Third worker's marginal product: units What is the average product of the second worker? Round your answer to the nearest whole number. Second worker's average product: units What are diminishing marginal returns, and with which worker do they set in for this firm? Diminishing marginal returns occur in the short run when variable inputs are added to a fixed input, and marginal product declines. In this case, diminishing returns set in with the fourth worker. O Diminishing marginal returns occur in the short run when variable inputs are added to a fixed input, and product declines. In this case diminishing Workers 1 2 3 4 Output (total product) 23 27 33 37
2) Consider the production function q = f(L, K) = ALªK®, where A, a, b are positive constants. For what values of A, a, and b are there diminishing marginal returns to labor L? What about diminishing marginal returns to capital? b. For what values of A, a, and b does the production process have diminishing marginal rate of technical а. substitution? с. For what values of A, a, and b are there constant/decreasing/increasing returns to scale?
We often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain.A negative marginal product of labor necessarily implies a downward sloping production frontier at that level of labor input.
Given that the level of labour is 10, the total production is 1,200, and the marginal product of labour is 200, what is the average product of labour?