Does it make sense to consider the returns to scale of a production function in the short run? A.Yes, this is an important short-run characteristic of production functions. . B.Yes, returns to scale determine the diminishing marginal returns of the inputs. C.No, returns to scale is a property of the consumer's utility function. D.No, we cannot change all of the production inputs in the short run

Short Run Production Function shows the relationship between the Physical inputs and physical…

Answered: Does it make sense to consider the…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

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(a) What is the long-run cost function if the production function is q = L + K? (b) Consider a general production function q = f(L, K) - Set up the Lagrangian that minimizes short-run cost. Show that the Lagrangian multiplier represents the marginal cost of production. - Set up the Lagrangian that minimizes long-run cost. Show that the Lagrangian multiplier represents the marginal cost of production.
What happen to salaries and wages when you are in a production/manufacturing business that you want to operate on and on for many production cycles? a. it will either be a variable and/ or fix cost b. it becomes fixed cost c. It becomes variable cost d. it is an operating expense When there are 3 indifference curves in a graph, what ideal point is desired? a. a point where budget and satisfaction coincides with each other b. a point that is within the highest budget line c. point that is within the highest indifference curve d. the point where there is satisfaction yielded An example of business that is servicing a captive consumers as there is an absence of choices to serve them. a. Duopoly b. Monopsony c. Monopoly d. Oligopoly
KA. A firm produces output with the production function, Q = F(K, L) = K0.5 L0.5 with r=4 and w= 2. The firm is using K=16 and just enough L to produce 16 units of output in the short run. How much could the firm save if it were producing 16 units in the long run?
In economics, what is the law of diminishing marginal returns? A. The tendency of firms to minimize production costs B. The observation that as additional units of a variable input are added to fixed inputs, the additional output diminishes C. The relationship between inflation and unemployment D. The impact of government regulation on business operations
How firm choose optimum combination of inputs in short run and long run explain theoritically and graphically?
Yt = F(Kt, Lt, At) Explain through example how diminishing marginal products can occur in the production process? If the form of the production function is a Cobb-Douglas function, show the production equation for constant return to scale conditions!Do diminishing marginal products also apply here?
According to a firm’s technology of production, you can take away 3 units of labor if you add 5 units of capital without changing production. The price of labor is $8 and the price of capital is $6. Assuming the firm’s MRTS is diminishing, this firm a. is minimizing cost at its current output level. b. should use more capital and less labor to lower the cost of producing its current output. c. should use less capital and more labor to lower the cost of producing its current output. d. should use less capital and less labor to lower the cost of producing its current output. e. None of above.
Draw the production function graph illustration the three stages (diminishing returns) in the production and the relationship between TP ,MP and AP . Explain how the production of one commodity leads to less production of others .
What about the other part of the question that talks about the elasticity of substitution and the returns to scale?
1.Suppose a chair manufacturer is producing in the short run (with its existing plant andequipment). The manufacturer has observed the following levels of production correspondingto different numbers of workers:Number of Workers Number ofChairs 1 10 2 18 3 24 4 28 5 30 6 28 7 25a. Calculate the marginal and average product of labor for this production function.b. Does this production function exhibit diminishing returns to labor? Explain.c. Explain intuitively what might cause the marginal product of labor to becomenegative.
onsider a producer with budget C = 200 who can buy labor L at a wage w = 10 and capital K at a price r = 5. The producer has the following production function F(K,L) = 3K1/3 L2/3 . a. Does F(K,L) exhibit increasing, decreasing, or constant returns to scale? Show your work. Consider a new production function F(K,L) = K1/3 L2/3 , where is a? ? positive constant not equal to 3. Does the new production function exhibit increasing, decreasing, or constant returns to scale? b. Using F(K,L) = 3K1/3 L2/3, find the optimal bundle. Show your optimal bundle on a plot (this should include isoquant and isocost curves). c. Suppose the budget is reduced to C = 100 and then C = 50. Find the new optimal bundles. Plot these bundles, along with the initial optimal bundle, on one plot. Draw the expansion path PLEASE SHOW GRAPHS do not use chat gpt
How firm choose optimum combination of inputs in short run and in logn run explain theoritically and graphically?

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	A.	Yes, this is an important short-run characteristic of production functions. .
	B.	Yes, returns to scale determine the diminishing marginal returns of the inputs.
	C.	No, returns to scale is a property of the consumer's utility function.
	D.	No, we cannot change all of the production inputs in the short run