19. A firm hires a new engineer. The engineer enables the firm to produce more output withthe same level of input. In economics, this is an example of:a) Economies of scope.c) Rental rate of capital.b) Diminishing marginal product of labour.d) Technological improvement.

Economies of scope: When an economy or a firm achieves efficiency through variety and not from…

Answered: 19. A firm hires a new engineer. The…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 36CTQ: Retune to Table 7.2. In the top half of the table, at what point does diminishing marginal...

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A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?
4. Which situation below describes the increasing returns stage of the production function?a. Hiring one more tailor results in three more suits produced per hour.b. Hiring one more baker results in the same output because there is now less thanone oven available per baker.c. Buying one more office computer causes there to be more computers thanworkers.d. Extending the workday results in more tired and less productive workers
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Q2. Define marginal physical product of labor (MPP) and marginal cost of product (MC). How are these two related? Why is MC called the mirror image of MPP? Explain.
Theory of Production1. If 1 orchard, 7 workers, and 3 tons of fertilizer yield 1,000 bushels of peaches, while 1 orchard, 7 workers, and 4 tons of fertilizer yield 1,300 bushels, a. the average product of labor equals 1,150 bushels. b. the marginal product of labor cannot be calculated. c. the average product of fertilizer equals 1,150 bushels. d. the marginal product of fertilizer cannot be calculated.When answering the next five questions (2-6), refer to the following graph.2. The marginal product of labor is rising with increased use of labor until a. 10 workers are employed. b. 20 workers are employed. c. 30 workers are employed. d. 40 workers are employed.3. The average product of labor is falling with increased use of labor once a. 10 workers are employed.. b. 20 workers are employed. c. 30 workers are employed d. 40 workers are employed.4. As long as fewer than 30 workers are employed, a. the average product of labor exceeds the marginal product of labor. b. the marginal product…
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7 The Paunch Burger restaurant chain currently produces 250,000 units of output by using 2,400 units of capital and 520 units of labor. Paunch Burger’s marginal rate of technical substitution (MRTS) of labor for capital is 3.5. If Paunch Burger’s regional manager wants to produce the same amount of output but increase the company’s use of capital by 175 units, how many units of capital will Paunch Burger now need to use?
14. A firm hires some number of custodians to clean a large warehouse. When only a few custodians are hired, they can quickly find and remove a lot of dust and debris. As the number of custodians increases, additional custodians have to go to greater lengths and spend more time to find and remove additional dust and debris. What property of production functions is relevant to the custodians’ situation?
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19. A firm hires a new engineer. The engineer enables the firm to produce more output with the same level of input. In economics, this is an example of: a) Economies of scope. c) Rental rate of capital. b) Diminishing marginal product of labour. d) Technological improvement.