11. The law of diminishing marginal returns: a. is relevant in both the short and the long-run. b. says that increasing fixed inputs eventually results in smaller and smaller increases in total output. c. says that increasing variable inputs eventually results in smaller and smaller increases in total output.

11. The law of diminishing marginal returns: a. is relevant in both the short and the long-run. b. says that increasing fixed inputs eventually results in smaller and smaller increases in total output. c. says that increasing variable inputs eventually results in smaller and smaller increases in total output.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

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Average total cost, average variable cost marginal cost and marginal product a. Why is the gap or difference between average total cost and average variable cost larger at initial level of production ction and then the gap is decreasing as output increases? Explain.
(a) Explain the law of diminishing marginal returns in the Theory of Production. (b) Does this law automatically imply that firms have negative returns to production?
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Question 1 Capital (K) Labor (L) Total Product (TP) Average Product (AP) Marginal Product (MP) 10 0 0 10 1 5 10 2 15 10 3 30 10 4 50 10 5 75 10 6 85 10 7 90 10 8 92 10 9 92 10 10 90 1.1 From the information in the table, calculate marginal and average product of each level of output. 1.2 At what point of output does diminishing marginal returns occur?
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2. If a firm has economies of scale, it must have increasing returns to scale. True or false? Explain.
3. With the aid of a graph, explain why marginal costs will necessarily intersect average total cost whenever average total cost reaches a minimum for “well-behaved” cost curves. (Can you show this mathematically? HINT: Think of properties that must be satisfied at a minimum.) I will thumbs up solution if it is original answer and not from ChatGPT, if ChatGPT is used I will thumbs-down and report to Chegg. thank you! :)
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c. Does the firm operate in the short run or long run? Why? d. What is the efficient scale of the firm?
21) In the short run where total variable cost is ________ at a(n) ________ rate, marginal cost is positive and decreasing.A) increasing; decreasing B) increasing; increasingC) decreasing; decreasing D) decreasing; increasing
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