Diminishing marginal product is also known as a) net investment. b) diminishing returns. c) depreciation. d) investment. O e) the steady state.
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- which of the following statements about the short-run production is true A. Total product starts to decline of the point of diminishing returns? B. When marginal product diminishes, is at its minimal pointQ47 In the long run, the law of diminishing marginal returns... a. Sometimes holds, depending on the production process. b. Does not hold because technology varies. c. Is exactly the same as in the short run. d. Does hold, regardless of the production process. e. Is not relevant because there are no fixed factors of production.The ff are true about economies of scale except one a. It is concept in cost function b. Costs keep on increasing as output increases c. Labor productivity is a major factor d. Exists when long run average costs decline as output expands
- Answer the following Questions. Include referencing where additional sources have been used a. Why will firms in most markets be located at or close to the bottom of the long-run average cost curve? b. Distinguish between implicit and explicit costs. How is it possible to have positive accounting profit and negative economic profit concurrently? c. Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale and constant returns to scale. d. What is the difference between production in the short run and production in the long run? Explain the shape of the long-run cost curve in relation to short-run cost curves?Given the production function, the portion of the total product curve, which is concave upward illustratesa. diminishing returns to scaleb. negative returns to scalec. increasing returns to scaled. constant returns to scaleThe data in the table below represents Total product (TP), for an agri-business involved in potato production. Capital (fixed factor) Labor (variable factor) Output(units) or Total physical product (TPPL) Average physical product (APPL) Marginal physical product (MPPL) 10 0 0 10 1 7 10 2 20 10 3 39 10 4 55 10 5 66 10 6 70 10 7 70 10 8 67 Calculate the marginal product and average product value. At what point do diminishing marginal returns set in? And using the values of AP and MP obtained from part (i), plot the graphs of TP, AP and MP being careful to fully label the graph and explain briefly the law of diminishing marginal returns from your computation. How does the hypothesis of diminishing returns (MP& AP) influence the behaviour of costs (MC& AC)?
- Consider the statement: “Total output starts falling when diminishing returns occur”. Do you agree or disagree? Explain.Diminishing returns*characterize all stages of production.eventually occur in all short-run production situations.are always associated with declining average product in the short-run.exist in the short run, because as additional units of an input are hired, the firm has to accept less satisfactory units. Total product curve in the first stage of production shows that it is increasing at an increasing rate because*the marginal product is positive and increasing.the marginal product is positive and decreasing.the marginal product is negative.the marginal product is zero. A negative MP*is consistent with a falling TP.is associated with a negative AP.may be consistent with rising or falling TP.indicates that TP is increasing at a decreasing rate. If the average output per worker in a firm is 7 units per hour, then the average output will rise as a result of hiring another worker if*the marginal worker produces 7 units.more workers are hired.the marginal output of the next worker exceeds…Number of Plants (K) Number of Workers (L) Total Production (Y) Marginal Product of Labour Average Product of Labour 1 1 200 1 2 83 1 3 64 1 4 54 1 5 47 1 6 0 Calculate and fill in the total Product column Calculate and fill in the Average Product Column With fixed capital, the firm can increase its marginal Product (MP) by increasing its workers infinitely. Do you agree or disagree with the statement and why? When does diminishing marginal return occur in the above table
- Q12 Isoquants are convex because... a. Both factors are subject to increasing returns. b. Both factors are subject to the law of diminishing returns. c. The marginal productivity of all factors is positive. d. The variable factor is subject to the law of diminishing returns. e. The marginal productivity of all factors is negative. Clear my choiceFor 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.Given a production function with a specific amount of fixed resources and one variable resource, which one of the following statements is correct?A The maximum average product occurs at peak production.B Increasing returns to variable input only occur with increasing production.C The y-intercept (i.e. the output at zero input) is equal to the fixed resourcesD Production may increase even when the marginal product is negative.E The marginal product increases until the point of inflexion.