1. Diseconomies of scale exist when: (Consider that more than one answer is correct.) there is specialization among workers coordination problems arise that are inherent in any large organization long-run average total cost falls as the quantity of output increases long-run average total cost rises as the quantity of output increases In the production process of Scott's coffee shop when the number of workers goes from 1 to 2, coffee production increases from 5 to 9 cups of coffee, so the marginal product of the second worker is 4 cups of coffee. And when the number of workers goes from 2 to 3, coffee production increases from 9 to 12, so the marginal product of the third worker is 3 cups of coffee. Please answer the following questions: a. What is marginal product? b. What happens to the marginal product with the increase in the number of workers? c. Why is this happening and how is this property called? Answer: U

1. Diseconomies of scale exist when: (Consider that more than one answer is correct.) there is specialization among workers coordination problems arise that are inherent in any large organization long-run average total cost falls as the quantity of output increases long-run average total cost rises as the quantity of output increases In the production process of Scott's coffee shop when the number of workers goes from 1 to 2, coffee production increases from 5 to 9 cups of coffee, so the marginal product of the second worker is 4 cups of coffee. And when the number of workers goes from 2 to 3, coffee production increases from 9 to 12, so the marginal product of the third worker is 3 cups of coffee. Please answer the following questions: a. What is marginal product? b. What happens to the marginal product with the increase in the number of workers? c. Why is this happening and how is this property called? Answer: U

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 3.7P

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