9. The law of diminishing marginal products indicates that:as extra units of a variable resource are added to a fixed resource,A)marginal product will decline beyond some point.because of economies and diseconomies of scale a competitiveB)firm's long-run average total cost curve will be U-shaped.the demand for goods produced by purely competitive industries isC)downsloping.D)beyond some point the extra utility derived from additional units ofa product will yield the consumer smaller and smaller extra amounts ofsatisfaction.

Law of diminishing marginal product is a short run concept where some factors are fixed and some are…

Answered: 9. The law of diminishing marginal…

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 6PA

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(10) The law of diminishing returns states that: (a) as a firm uses more of a variable resource, given the quantity of fixed resources, the average product of the firm will increase. (b) as a firm uses more of a variable resource, given the quantity of fixed resources, marginal product of the firm will eventually decrease. (c) in the short run, the average total costs of the firm will eventually diminish. (d) in the long run, the average total costs of the firm will eventually diminish.
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. d. says that increasing variable inputs eventually results in smaller and smaller increases in total cost.
1. A firm is said to be earning normal profit whenever:A. Accounting profit is zero.B. Economic profit is positive.C. Accounting profit is positive.D. Total revenue equals explicit and implicit costs.2. If a 10% increase in inputs results in a 20% increase in output, then the firm is said to exhibit:A. Diseconomies of scaleB. Diminishing marginal returns to scaleC. Constant returns to scaleD. Economies of scale3. Economists have traditionally attempted to avoid the trap of:A. Thinking in terms of total utility.B. Computing marginal utilityC. Making interpersonal utility comparisons.D. None of the above.4. According to the water-diamond paradoxA. Water has a lower MU than Diamond.B. Water has a higher TU than Diamond.C. Prices reflect MU and not TUD. All of the above.
1. The law of diminishing returns indicates that:a. as extra units of a variable resource are added to a fixed resource the marginal product will decline beyond some point.b. because of economies and diseconomies of scale a competitive firm's long-run average cost curve will be U-shaped.c. the demand for goods produced by purely competitive industries is down sloping.d. beyond some point the extra utility derived from additional units of a product will yield the consumer smaller and smaller extra amounts of satisfaction. Why do marginal costs tend to rise, and marginal benefits tend to fall? 2. Is it possible to avoid Diminishing Marginal Return? Why?3. Suppose that the Law of Diminishing Returns sets in immediately (that is, there is no range of output over which the Division of Labor holds). What would the short run marginal cost, average cost, and average variable cost curves look like? Explain.4. Which situation below describes the increasing returns stage of the production…
1) In short, what does the production function describe? A .how a firm maximizes profits. B. how a firm turns inputs into output. C. the minimal cost of producing a given level of output. D. the relationship between cost and output. 2)What is the significance of the point at which Marginal Revenue and Marginal Cost curves intersect on a graph? A. total revenue is equal to variable cost. B. total revenue is equal to fixed cost. C. total revenue is equal to total cost. D. profit is maximized.
1. If the marginal product of an input is falling, then what must be true? Average fixed costs must be constant. Marginal cost must be rising. Average total cost must be constant. Marginal cost must be constant. 2. If Captain America and Thor decide to specialize, who should specialize in each good? Captain America should specialize in shields. Thor should specialize in hammers. Thor should specialize in both goods. Captain America should specialize in both goods. Captain America should specialize in hammers. Thor should specialize in shields. 3. Aditya regularly consumes two goods, which we’ll call good X and good Y. One day, the price of good X decreases. As a result, Aditya decreases his consumption of good Y. Based only on this information, goods X and Y seem to be: Substitutes for each other Complements for each other Normal goods Inferior goods
19.What is meant by zero economic profit? If a firm earns zero economic profit in long run does it violate the profit maximizing behaviour of a firm in long run as if there is no profit then there is no point of production?
Return to the problem explained in Table 7.13 and Table 7.14. If the cost of labor remains at 40, but the cost of a machine decreases to 50, What would be the total cost of each method of production? Which method should the firm use, and why?

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