General Robotics uses only labour and capital as inputs. Suppose General Robotics' budget for production of gadgets decreased by 20%, causing the company to produce 20% less gadgets. What effect would this development have on this company's demand for labour? O A. 100% scale effect; demand for labour would increase. O B. 100% scale effect; demand for labour would decrease. OC. 100% substitution effect; demand for labour would decrease. O D. 100% substitution effect; demand for labour would increase.
Q: QUESTION 6 The basic difference between the short run and the long run is that O A. all costs are…
A: A short-run alludes to that time-frame, in which the establishment/installation of a new plant and…
Q: What is the elasticity of substitution for the production function f(K, L) = KA L/A ? %3D O a. O b.…
A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…
Q: The shape of this production function suggests O A. a constant marginal product of capital. B. an…
A: Marginal product of capital is the additional output obtained by increasing capital by one unit. The…
Q: Suppose that a firm's long-run production function where A>0 Which one of the following is true? ALK…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: Explain the term "marginal rate of technical substitution." (Assume a two-input production…
A: Marginal rate of technical substitution examines the ratio of the marginal products for the two…
Q: WAGE EMPLOYMENT In the labor market depicted in figure, an increase in oil prices OA. shifts labor…
A: Labor market is also known as the job market. Here, employers demand labor and employees supply…
Q: Diminishing marginal product suggests that the marginal a. cost of an extra worker is decreasing O…
A: Law of diminishing marginal productivity states that the marginal production from the additional…
Q: The figure shows the production function of a farmer who produces grain by working certain hours…
A: We have given a graph showing production curve of a farmer. Labor hour is on x-axis and quantity of…
Q: Assume a firm is attempting to minimize cost by selecting units of capital and units of labor in…
A: *Answer: Total cost(Baseline)= Units of labor x wage rate + Units of capital x rental rate Total…
Q: Which of the following statements is not correct? Select one: O a When MC is below AVC,…
A: The MC cuts the AVC at the minimum point of AVC. The production function shows the relationship…
Q: In the short run, when marginal product is positive and increasing O a. stage 1 production O b.…
A: Decreasing but still positive marginal returns characterise Stage II's short-run production. The…
Q: The average product of labor of workers in the Sony electronics facility that builds televisions is…
A: The markets are the place where the goods and services are sold and purchased. This divides the…
Q: Suppose that there are two goods X and Y produced in perfectly competitive industries facing…
A: Given that:- Two goods exist i.e X and Y Two inputs exist i.e Labor and capital denoted by L and K…
Q: A firm uses both labor and machines in production. Explain why an increase in the average wage rate…
A: As the Wage rate rises, the labour demand curve (the marginal sales product curve) moves up and to…
Q: Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: A firm's demand for labor will increase if the O marginal product of labor decreases. O price of the…
A: A firms demand for labor depends on various factors like :- 1) marginal productivity of the labour…
Q: Which one of the following occurs when an individual enters the paid work force? O a. The…
A: When the individual enters the workforce then it is not able to devote much time to housework. This…
Q: A firm uses Labour (L) and Capital (K) to produce commodity (Y). The quantities of the inputs and…
A: The short-run production is essentially characterized by three stages of production as at least one…
Q: How can we measure the opportunity cost of leisure? The opportunity cost of leisure is O A. economic…
A: Opportunity cost is the cost of next best alternative forgone.
Q: The difference between the short run and the long run is that: O A. In the short run all inputs are…
A: The long-run is best defined as a time period during which all inputs can be variable. It provides…
Q: An increase in the price of capital will the demand for labor if the scale effect dominates. demand…
A: In the production process, labor and capital are two basic inputs to generate output. Some products…
Q: Points on a firm's total product curve are اختر أحد الخيارات .a. both attainable and technologically…
A: The total product curve shows the maximum quantity of output that a firm can produce with a given…
Q: If a price-taking firm's production function depends only on labor L and is given by q = 2L2, then…
A: Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: QUESTION 8 Which of the following statements concerning the relationships between total product…
A: We can answer this question using subsequent graph of the Total Product, Marginal Product and…
Q: Referring to Figure 6, Firm X uses labour (L) as the main inputs. Which of the following statements…
A: A production function shows the relationship between the inputs used and the output produced in a…
Q: The marginal product of labour curve intersects the average product of labour curve from above…
A: Here Answer is "Between 4 and 5"
Q: If, by increasing the qulf, by increasing the quantity of labour used by one unit, the firm can give…
A: The marginal rate of technical substitution (MRTS) labor for capital is considered to be the rate by…
Q: Suppose that labor is Valerie's önly Varlable cost and that SHe Has Use the orange points (square…
A: Valerie's performance pizza is a small restaurant that sells pizzas. He owns three ovens in which…
Q: Assume that you are studying an economy which produces two goods, x and y, using two factors of…
A: Suppose there is excess supply of good y as compared to good that's there for the price of why will…
Q: Suppose a firm is operating at an input combination such that MRTS,LK How should the firm adjust its…
A: Firm will maximize profits when MRTS is equal to price ratio of two inputs.
Q: If the price of capital decreases and the demand for labour increases then Select one: O A. the…
A: The production function exhibits the relationship between factors of production and the output…
Q: Which of the following statements is true? O A. The MP of labour is increasing at short run because…
A: Marginal Product of Labor (MPL): - it is the change in total production due to the employment of an…
Q: The demand curve for a factor of production will be O A. perfectly elastic if the factor is unique…
A: Assuming it's not difficult to track down a substitute item when the cost of an item builds, the…
Q: If the wage rate is above the equilibrium wage rate, the quantity of labor demanded is the quantity…
A: If actual wage rate is higher than equilibrium wage rate, hiring becomes costlier for firms, so the…
Q: If the firm is operating in a high wage country, where capital cost $150 per unit and labor cost…
A: Production cost is the cost associated with both labor and capital cost where labor cost is the wage…
Q: Total Output Per Day Price of Good 10 $ 15 14 14 19 13 23 12 6 27 11 7 31 10 A firm's labor input,…
A: Profit maximisation is the ultimate goal of firms. The firm will hire labor where profit is…
Q: 5. Consider a firm that uses both labor and capital in production. The price of capital is $20 per…
A: Cost is the total expenditure incurred in producing a good or service.
Q: If a decrease in the price of capital results in increased demand for capital and a proportional…
A: Complements in production: When two or more goods are produced jointly from the same inputs are…
Q: During the 2008–2009 recession, the Z-pop ratio O A. increased. O B. stayed the same. OC. decreased.…
A: The Z-pop ratio refers to the utilization-to-population ratio. It is the share of the working-age…
Q: How does the slope of the production function illustrate diminishing returns? The slope of the…
A: The production function is a relationship between the amount of inputs and the output produced.…
Q: Imagine that you work for 40 hours per week at the wage rate of £10 an hour. Your free hours are…
A: Given: Working hours = 40 Wage rate = £10 per hours Free hours = 128 hours per week There is…
Q: QUESTION 8 Suppose that the production function y-f(x_1,x_2) (where: y is output level, x_1 is a…
A: Question8: Answer: (d) y to increase with x_1 at a increasing rate, due to increasing returns to…
Q: The wage rate is $25 per hour and the cost of capital is $50 per hour. At the current output, the…
A: MPL/w=MPK/r is the cost minimization condition. MPL is the marginal product of labor w is the age…
Q: The demand for labor curve of nurses shifts rightward if the O A. supply of labor curve for nurses…
A: Demand for labor is equal to the value of marginal product (VMPL), where VMPL = MPL x Output price…
Q: When the total product curve is falling, the: O a. average product of labor must be negative. O b.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Explain intuitively what might cause the marginal product of labor to become negative. The marginal…
A: The correct answer is C. If workers get in each others way there would be a time where the…
Q: You are an employer seeking to fill a vacant position on an assembly line. Are you more concermed…
A: In the labor market, an employer needs to make decisions whether to employ one more unit of labor or…
Q: Can a firm have a production function that exhibits increasing returns to scale, constant returns to…
A: Production function shows the relationship between inputs and output. it shows how many inputs is…
Q: 38. For the production function y = 3x₁ + 4x2 , which of the two inputs is more productive when x₁…
A: 38. y = 3x1 + 4x2 MP1 = dy/dx1 = 3 MP2 = dy/dx2 = 4 Marginal product of x2 is greater than marginal…
Step by step
Solved in 2 steps
- Consider a factory that produces iPhones. This factory relies on both employees (labor) and machines (capital). Which of the following would decrease the demand forlabor?O a. Public taste shifts away from iPhones towards AndroidsO b. The price of capital falls and labor is easily substituted for capital.O c. The factory has trouble hiring competent workers (workers become less productive).O d. (b) and (a)O e. all of the aboveWhich one of the following statements regarding the price-setting curve is true?O. If labour is the only factor of production, firms will set prices as a markup over wagesO. An increase in product market competition will raise the markup.O. The price-setting equation models firms as setting prices as a mark-up over unit labour costsO. If the markup is constant, the price setting curve must be flatO. The price setting curve is flat because of diminishing returns to labourO. None of the aboveO. All of the aboveConsider a firm for which production depends on two normal inputs, labor and capital, with prices w and r, respectively. Initially the firm faces market prices of w = 6 and r = 4. These prices then shift to w = 4 and r = 2.a. In which direction will the substitution effect change the firm’s employment and capital s tock?b. In which direction will the scale effect change the firm’s employment and capital stock?c. Can we say conclusively whether the firm will use more or less labor? More or less c apital?
- 69. If the price of labor falls relative to the price of capital, and as a result the quantity of capital employed decreases, it can be concluded that: A. The substitution effect is greater than the output effectB. The output effect is greater than the substitution effectC. The income effect is greater than the output effectD. Labor cannot be easily substituted for capitalMany businesses taco increasing marginal costs because___ O A. in order to increase output, you have to purchase more inputs.O B. a business may have to shift to more expensive sources of inputs in order to increase output.O C. most businesses are not near capacity.OD. when the price falls, output increases.38. For the production function y = 3x₁ + 4x2 , which of the two inputs is more productive when x₁ is 1 and x₂ is 10 ? O. X1 O. X2 O. neither ; for this situation , they have equal marginal products O. cannot tell from the above information 39. Given the production function y = 3x₁ + 4x2 , what is the marginal rate of technical substitution of x₁ for x₂ ( MRSx1x2 ) when x₁ is 5 and x₂ is 5 ? O. -0.75 O. -x1 / 5 O. 5 O. -5
- Which of the following statements is not correct? Select one: O a When MC is below AVC, AVC is rising. O b. The total product curve shows how a firm's output changes when the quantity of labour changes. O c. Diminishing marginal returns occur when the marginal product of a worker is less than the marginal product of the previous worker. O d. The change in total product resulting from a one-unit increase in the quantity of labour is called marginal product. ous page NextAccording to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuringplan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Priorto restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). Tohire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishidetermine that its marginal productivity of capital is 0.5 small cars per hour at its new targetedlevel of output and that capital is procured in a highly competitive market. The same studyindicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine therate at which Mitsubishi can rent capital and marginal productivity of labour at its new targetedlevel of output. To minimize costs…1.Explain how a firm uses resources price and value data to determine the appropriate combination of capital and labor resources to use in order to maximize profits. 2.how does this change when the firm want to produce a specific quantity of product with the least cost combination of resources? 3. if a software firm estimates that the MP of labor is 3 apps per month and the price is labor is $1100 per month, while the MP of capital is 5apps per month and its price is $2000, should the firm hire more labor and decrease its capital use or increase its use of capital and use fewer labor resources?
- In a perfectly competitive labor market, a profit maximizing firm will hire labor up to the point at which the:O. wage rate >marginal revenue productO. wage rate= marginal resource costO. wage rate =marginal productO. wage rate = marginal revenue productO. wage rate <marginal revenue productAccording to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Prior to restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). To hire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishi determine that its marginal productivity of capital is 0.5 small cars per hour at its new targeted level of output and that capital is procured in a highly competitive market. The same study indicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine the rate at which Mitsubishi can rent capital and marginal productivity of labour at its new targeted level of output. To minimize…hy does a measure of labor productivity—the output produced per worker– rise for many firms during recessions? During the boom years period of 2005through November 2007, the annual average output per worker was lower in U.S.manufacturing than during the Great Recession of 2007–2009 as well during therelatively low-demand years since then through 2013.Firms produce less output during recessions as demand for their products falls.Consequently, firms typically lay off workers during recessions. Thus, whetheroutput per worker rises or falls depends on whether output or employment fallsby more. The labor productivity pattern over the business cycle differs across in-dustries. If we know about a firm’s production process, can we predict whetheroutput produced per worker will rise or fall with each additional layoff?
