cermine whether the production technology in each situation exhibits constant returns to scale, in asing returns to scale, or decreasing returns to scale. Explain why. a) In a kitchen, there used to be one stove and two cooks. They were able to prepare 12 dishes in am hour. Recently, they buy one more stove and hired two more cooks. Now they can prepare 20 dishes in an hour. b) Three people were digging holes using a shovel for each person. They could dig one hole for each in an hour. Then six more people were hired, so now there are nine people digging holes, with each person using a shovel. They can dig

cermine whether the production technology in each situation exhibits constant returns to scale, in asing returns to scale, or decreasing returns to scale. Explain why. a) In a kitchen, there used to be one stove and two cooks. They were able to prepare 12 dishes in am hour. Recently, they buy one more stove and hired two more cooks. Now they can prepare 20 dishes in an hour. b) Three people were digging holes using a shovel for each person. They could dig one hole for each in an hour. Then six more people were hired, so now there are nine people digging holes, with each person using a shovel. They can dig

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 33CTQ: Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then...

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Similar questions

What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
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What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?
A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
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?
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