1. Imagine an economy with a constant returns to scale production function. Answer thefollowing:(a) Suppose this economy has 3000 units of physical capital, with workers having 200years of education, and they work 5000 hours. Their output is worth $10,000.Now imagine the same economy has 6000 units of physical capital, 400 years ofeducation, and the workers work 10000 hours. What is their output now?(b)b) Suppose this economy has 3000 units of physical capital, with workers having 200years of education, and they work 5000 hours. Their output is worth $10,000.Now, their physical capital grows to 6000 units, but the other two inputs remainthe same. Provide a range for what the economy's output might be. That is,what is the lower bound, and what is the upper bound for this economy's output?(c) Suppose this economy has 3000 units of physical capital, with workers having 200years of education, and they work 5000 hours. Their output is worth $10,000.Call this Country A. Now consider another economy with 1500 units of physicalcapital, with workers having 100 years of education, and they work 2500 hours.Their output is worth $5,000 Call this Country B. In which economy would anextra unit of physical capital more positively affect output?

Constant returns to scale refers to that technology /production function in which the output changes…

1. Imagine an economy with a constant returns to scale production function. Answer the following: (a) Suppose this economy has 3000 units of physical capital, with workers having 200 years of education, and they work 5000 hours. Their output is worth $10,000. Now imagine the same economy has 6000 units of physical capital, 400 years of education, and the workers work 10000 hours. What is their output now? b) Suppose this economy has 3000 units of physical capital, with workers having 200

1. Imagine an economy with a constant returns to scale production function. Answer the following: (a) Suppose this economy has 3000 units of physical capital, with workers having 200 years of education, and they work 5000 hours. Their output is worth $10,000. Now imagine the same economy has 6000 units of physical capital, 400 years of education, and the workers work 10000 hours. What is their output now? b) Suppose this economy has 3000 units of physical capital, with workers having 200

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 9PA

See similar textbooks

Similar questions

What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
What is a production function?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
QUESTION 1 Consider the following production functions, where q is the quantity produced of the good, Kis the quantity of capital used, and L is the quantity of labor used:Production function 1q (K, L) = K^αL^βProduction function 2q (K, L) = K^α + L^βa) What is production function? Explain by providing appropriate graph.b) Does Production function 1 have decreasing, constant, or increasing returns to scale?Explain.c) Suppose that α = 1 and β = 1. Does Production function 2 have decreasing, constant,or increasing returns to scale? Explain.d) Suppose that α = 1/2 and β = 1/2. Does Production function 1 have decreasing,constant, or increasing returns to scale? Explain
hello, I need help with my homework 4.7 When to Use the Principle of Diminishing Returns? You are the manager of a firm that produces memory chips for mobile phones. In your decision about how much output to produce this week, would you use the principle of diminishing returns? Explain. In your decision about how much output to produce two years from now, would you use the principle of diminishing returns? Explain. My Textbook: macroeconomics by o’Sullivan 10th addition 978 013 519 6434 thank you
(a) What do we mean by "returns to scale"? (b) In this context, list and explain the three different types of returns to scale that a firm could experience in production.
1) a. What is a production function? How does a long-run production function differ from a short-run production function?b. Explain the term “marginal rate of technical substitution.” What does a MRTS = 4 mean?
2.1 The production function illustrates the relationship between.......... and..................
3.ConsiderthsCobb-Dougas production function：Y=K"L".What does this function exhibit? a.Diminishing returns to scale b.Increasing returns to scale C.Constant returns to scale d.None of the above
10. Do the following production functions have increasing, decreasing, or constant returns to scale? Show work.(i) Q = 3K+2L (ii) Q = 6KL
2. Calculate the appropriate learning rate and the overall average improvement rate for this data set. (Hint: Subtract Average labor/unit of previous lower production level from the Average labor/unit of the production level for which you are trying to figure out the learning rate, then divide by the previous production level average labor/unit. See example above 6-5.4/6=10%) I included an image that has a table in it