Assuming that the production function [Y=A(K, L, N, H)] exhibits constant returns to scale we can derive productivity in the following way A.) Y/L = A(K, 1, H, N) B.) Y/L = A(K/L, 1, H/L, N/L) C.) Y/L = AK, AL, AH, AN D.) Y/L = C+I=G=NX

Assuming that the production function [Y=A(K, L, N, H)] exhibits constant returns to scale we can derive productivity in the following way A.) Y/L = A(K, 1, H, N) B.) Y/L = A(K/L, 1, H/L, N/L) C.) Y/L = AK, AL, AH, AN D.) Y/L = C+I=G=NX

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 1.5CE

See similar textbooks

Related questions

Q: According to the midpoint method, the price elasticity of demand for tomatoes between point X and…

A: Elasticity measures the responsiveness of quantity demanded to changes in price.

Q: You need $3,000 to buy a new stereo for your car in 3 years. What value you must have now if the…

A: Compound interest is the interest determined on the head and the interest gathered over the past…

Q: Test Bank 6.33 A human is an example of a reservoir. Select an answer and submit. For keyboard…

A: The above statement, A human is an example of a reservoir - TRUE

Q: Now consider Marie’s problem in the long run, where her stock of cattle may vary. Set up her long…

Q: Discuss methods to overcome inflation in India

A: Inflation refers to an increase in the prices of goods and services.

Q: Calculate the amount of simple interest and the amount for: a)$40,000 at 36% per year in 3 years and…

A: To calculate the Simple interest we need to solve for separate time periods . We need to solve for…

Q: following table of long-run total costs for three different firms: Hand written city 1 2 3 4 5 6 7 A…

A: Economies of scale This is an illustration of a monopoly business model - where the most proficient…

Q: sider the following table of long-run total costs for three different firms: Quantity 1 2 3 4 7 Firm…

A: Question related to the topic Economies of scale

Q: If we examine the effects of an iPhone price change on the quantity sold "holding everything else…

A: In economics when an economists wants to determine the relationship between two factors, he requires…

Q: Quantity 1 2 4 5 6 7 Firm A 30 60 90 120 150 Firm B 75 85 90 95 100 Firm C 40 65 90 115 140 170…

A: Economies of scale happen when an expansion in yield prompts a falling all-out typical expense and…

Q: Explain “Creative destruction-Darwinian theory” in terms of businesses struggling to survive the…

A: Darwinian theory of evolution by natural choice: It cannot describe the origin of individual species…

Q: For the following problem, what would be the objective function that aims at minimizing the total…

A: Given,

Q: 4. Assume that a monopolist sells a product with the cost function CF + 20Q, where C is total cost,…

A: In economics, an inverse demand function is the inverse function of a demand function. The inverse…

Q: Suppose that the European Union follows a flexible exchange rate regime. The exchange rate between…

A: Exchange Rate is the relation between the values of two different currencies. The values depend on…

Q: The main factor that separates wealthy from poor countries is A.) Differences in productivity…

A: The gap between the rich and poor is widening rapidly.

Q: Mr. Benedito, a grocery store owner, borrows $50,000.00 from a loan shark, handing him a $77,000.00…

A: Given Mr. Benedito borrows $50,000, So present value P=$50,000 The value of the promissory note is…

Q: The nominal GDP of the U.S. in 2019 was approximately $21.4 trillion. This means that The value of…

A: If we compare growth between two periods, the nominal GDP growth between them may be overestimated…

Q: Explain the different types of market structure ( bullet points)

A: Market refers to the system through which the buyers and sellers interact with each others. The…

Q: If RRSP contributions of $3530.02 at the end of every six months are projected to generate a plan…

Q: The following table shows nominal GDP and an appropriate price index for a group of selected years.…

A: Nominal GDP, unlike real GDP, does not correctly reflect an economy's output. The total national…

Q: Which of the following best describes what happens when you move along the supply curve? Quantity…

A: The law of supply explains the movement along the supply curve. When prices rises, producers are…

Q: Question 91 c) Suppose that the government is interested in raising the tax revenue. The only option…

A: Price Elasticity refers to the responsive in the quantity demanded due to corresponding change in…

Q: Costs 0 MC D ATC

A: The firm will shut down it's operations and exit the market at a point for a competitive firm is…

Q: 3) Using benefit-cost ratio analysis, a 10-year useful life and a MARR of 25%, determine which of…

A: The benefit-cost ratio (BCR) is an indicator showing the relationship between the relative costs and…

Q: where q is the number of units produced and A is the time in months that LeAnnʹs manager has spent…

A: The average cost of production at any given quantity will be reduced when A increases. So, this…

Q: Consider the following table of long-run total costs for three different firms: Quantity 1 2 3 4 5 6…

A: Economies of scale refers to the decrease in the avergae cost of production when the firm increases…

Q: a. $30 b. $60 c. $100 d. $75 Price $10

A: consumer surplus, also called social surplus and consumer's surplus, in economics, the difference…

Q: Suppose the demand for chocolate bars is downward sloping. Which of the following will occur as a…

A: Downward sloping demand curve implies the inverse relationship between price and quantity demanded.

Q: round knife. The estimates are summarized below. Compare them on the basis of annual worths at i=…

A: Given Round knife Straight knife First cost -300,000 -210,000 AOC per year -42,000…

Q: 3) Diminishing marginal rate of substitution can be seen when indifference curves A) become flatter…

A: The curve that depicts combinations of goods that could provide the consumer with an equal level of…

Q: Determine the level of Q that maximizes total revenue. Determine the level of Q that minimizes the…

A: Given Demand equation faced by the manufacturer P=10-0.0004Q .... (1) Total cost TC…

Q: Suppose that the short-run world demand and supply elasticities for crude oil are −0.076 and 0.088…

A: The price elasticity of demand is a measurement of how price affects the quantity demanded. When…

Q: Find the present worth of cash flows of $1000 that start now (time 0) and continue through year 10,…

Q: Why did Trump and many of his supporters see NAFTA as "the worst trade deal maybe ever"?

A: North American Free Trade Agreement (NAFTA), a questionable trade settlement endorsed in 1992 that…

Q: Which one of the following pairs of goods is likely to have a negative cross-price elasticity of…

A: Cross price elasticity of interest gauges the defree of responsiveness of chnage in amount demnd of…

Q: Maintenance on an old machine is $100 this year but is expected to increase by $25 each year…

A: In the present worth analysis, we find the present values of all the cash flows.

Q: Professional underwater divers are known to have high wages and work an average of only 20 hours a…

A: The professional underwater divers paid for their work. They are paid high wages and they have to…

Q: If you make $83200 in Alaska, how much would you need to make in Arkansas to keep the same standard…

A: Real income which means how many goods can be bought with given level of income . If we want to…

Q: What are the seven virtues which Deirdre McCloskey claims as Bourgeois Virtues? O Courage,…

A: The answer is - Option 1. Courage, temperance, justice, prudence, faith, hope and love.

Q: In the 1970s, Nestle the Swiss based MNC manufacturer and distributor of food and beverage products,…

A: Business: It refers to the firm that helps in creating more wealth and growth in the economy. More…

Q: by two family members 7. Firm 1 produces output X with a cost function TC₁=X². Firm 2 produces…

A: Firm 1:- Output=X Total cost=TC1=X2 Firm 2:- Output=Y Total cost=TC2=Y2+XY Competitive price of…

Q: Which of the following is a major macroeconomic goal of nearly every society? increasing government…

A: There are many macroeconomic goals of an economy like to reduce inflation, increase employment,…

Q: Firm A High Price Low Price A = $250 A $325 B = $250 B = $200 A = $200 A $175 B = $325 B = $175…

A: Game theory is concerned with the choice of an optimal strategy in conflict situations.

Q: The following graph shows the domestic supply of and demand for wheat in Kenya. The world price (w)…

A: International Trade occurs when goods and services are transported over country borders for sale in…

Q: A bank is offering an interest rate of 3.50% per year, compounded every 3 months. What is the…

A: An effective annual interest rate is the genuine profit from a bank account or any interest-paying…

Q: hat is the amount produced, at the end of 5 years, by annual deposits of $2,000,000.00 at a rate of…

A: Constant annual deposit = 2000,000 Time = 5 years Interest rate = 6 % annually

Q: American companies form the majority of MNCs (multi-national corporations). On the other hand, many…

A: The MNC or international business operate in different companies and thus they face different…

Q: Refer to the figure above. If Good Z is an inferior good and consumers' incomes decrease at the same…

A: Given Good Z is inferior good. A good is inferior when its demand decreases as the income…

Q: Refer to the demand schedule below: Price Quantity ($) demanded 80 0 70 50 60 100 50 150 40 200 30…

A: Total revenue is the total amount of money a company brings in from selling its goods and services.…

Q: The main reason why antiques have a high price is because: Select one: His demand is perfectly…

A: The current status of the existing price of antiques must be analyzed before evaluating the…

Question

Assuming that the production function [Y=A(K, L, N, H)] exhibits constant returns to scale we can derive productivity in the following way

		A.) Y/L = A(K, 1, H, N)
		B.) Y/L = A(K/L, 1, H/L, N/L)
		C.) Y/L = AK, AL, AH, AN
		D.) Y/L = C+I=G=NX

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Which of the following production functions exhibits constant return to scale? A) q=KL B) q=KL0.5 C) q=K+L D) q=log(KL)
Given the linear production function: Log (Q) = Log (0.5) + Log (L) + Log (K) Where Q is the level of output, L is the units of labor and K is the units of capital employed. a. Transform the above expression from log linear form to Cobb Douglas form. b. Interpret the returns to scale concept of the Cobb Douglas function. c. What is the percentage increase in output if labor and capital increase by 20%?
Returns to scale in production: Recall that a production function F(K, L) exhibits constant returns to scale if doubling the inputs leads to a doubling of output. If it leads to more than doubling of output, there are increasing returns to scale; if it leads to less than doubling of output, there are decreasing returns to scale. The answers to parts (a) and (f) are worked out below. (a) Y = K1/2L1/2. If we double K and L, output is (2K) 1/2(2L) 1/2 = 21/221/2K1/2L1/2 = 21/2+1/2K1/2L1/2 = 2K1/2L1/2. So output exactly doubles, and there are constant returns to scale. (b) Y = K1/3L2/3 + . This production function says you get units of output “for free,” that is, even if there is no capital and no labor. Then you produce on top of that with a Cobb-Douglas production function. If we double K and L, output is Notice that the first term is doubled, but the output we got for free (the A) is left unchanged. Therefore, output is less than doubled, and this…
For each of the following production functions, determine whether it exhibits increasing, constant or decreasing returns to scale: a) Q = 2K + L b) Q = 3L + L/K c) Q = Min(2K,L) d) Q = L*K
The concept of ‘constant returns to scale’ implies that, if the state of technology (A) remains constant, an increase of x times in both the capital (K) and the amount of labour (N) will lead to an increase of x times in the output.
Which of the following equations does not represent a plausible production function? a.F(K,L) = 2KL b.F(K,L) = 2K-2L c.F(K,L) = 2(KL)0.5 d.F(K,L) = KL
For a production function q= f(K, L) = K^1/3 L^1/3 and factor prices w=8 and r=1, answer the following questions: (a) Explain what returns to scale mean and its implication for the cost function. What returns to scale does this production function exhibit? (b) optimal mix and equation of the expansion path. What does it show? (c) Minimized cost function for the technology. (d) Why are the short-run cost curves different from the long-run cost curves? Your answer must include the terms expansion path and optimal input mix.
For the production function Q = 0.7L + K, returns to scale: a. Can be increasing, decreasing, or constant depending on the values of L and K. b. Is decreasing. c. Is increasing. d. Is constant.
y = F(L,K) = min(L,3K) Show if the leontief production function displays constant returns to scale.
Show that the two-input Cobb-Douglas production function (attached) has decreasing return in scale (DRS), constant return of scale (CRS) or increasing return of scale (ITS) depending on if alpha1 + alpha2 is smaller than, equal, or larger than 1.
3) If we duplicate all the production factors of the production function f (L,K) = L 2/3. K1/3, where L are working hours, k the capital then the amount of product will be multiplied by: Choose one: A) 4 B) 2 C) 1 D) 8 E) 0.5
The production function of a firm is f(x, y) = min{x, y}. This is a constant returnsto scale production function.• True• False Please explain!