Identify the truthfulness of the following statements. I. When the marginal product of labor is falling, the average product of labor is falling. II. When the marginal product curve lies above the average product curve, then average product is rising. O A. Both land II are true. B. Both I and Il are false. C. I is true; II is false. O D. I is false; II is true O E. None of the above Reset Selection

Identify the truthfulness of the following statements. I. When the marginal product of labor is falling, the average product of labor is falling. II. When the marginal product curve lies above the average product curve, then average product is rising. O A. Both land II are true. B. Both I and Il are false. C. I is true; II is false. O D. I is false; II is true O E. None of the above Reset Selection

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 8P

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7 The Paunch Burger restaurant chain currently produces 250,000 units of output by using 2,400 units of capital and 520 units of labor. Paunch Burger’s marginal rate of technical substitution (MRTS) of labor for capital is 3.5. If Paunch Burger’s regional manager wants to produce the same amount of output but increase the company’s use of capital by 175 units, how many units of capital will Paunch Burger now need to use?
Suppose that government wishes to promote more capital intensive agriculture and subsidises agricultural capital equipment in order to achieve this. a) Using an isoquant map of the tradeoff between capital and labour, show how the reduced cost of capital will affect the individual farmer’s decision problem. b) Using a production function approach with labour as the variable input, show how the reduced cost of capital will affect the individual farmer’s decision problem. c) What overall effect on agricultural employment would you expect, given your answers in (a) and (b)?
Can you put a solution to this? Instruction: (see other instructions below, for the submission of answer sheet) A. Complete the Column for MRS. Show your solution for each answer, Number each solution that corresponds to each unknown MRS. B. Graph the Labor-Capital function, making sure that Labor units are in the horizontal axis MRS = change in K/ change in L change in K = final K - initial K change in L = final L - initial L MRS = 26-30 /2-1 MRS = -4/1 MRS = - 4 Units of Labor Capital MRS 1 30 0 2 26 -4 3 22.5 (1) 4 19.5 (2) 5 17 (3) 6 15 (4) 7 13.5 (5) 8 12.5 (6) 9 12 (7) 10 12 (8)
Production Function. Consider the Cobb-Douglas production function discussed in class:F(K, L) = AK^1/3 L^2/3. Suppose that parameters are initially A = 1, K = 150, and L = 10. d) Suppose that the quantity of labor L doubles. Calculate Y, w, r, Y/L, and K/L. Com-ment on how and why these numbers changed relative to (c) and why they did so. E) Suppose that the quantity of capital K doubles as well. (So now both K and L aretwice their previous value). Calculate Y, w, r, Y/L, and K/L. Comment on how thesenumbers changed relative to both their initial values, and their values in (d).
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a. How impact substitute’s assumption is applicable in Law of variable proportion? b. How the different types of return are determined in Law of variable Proportion c. Why the law of variable proportion is called Law of diminishing returns?
The hiring of labour with fixed factor of production under short run after sometimes leads to increase in cost only. What’s your opinion at what stage o production producer should make addition in labour, identify which concept in economics explains the whole situation, justify your answer why it happens wit the help of table and diagrams
(a) Complete the following table and draw the corresponding graphs. Capital inputs Labor inputs Total product Average product Marginal product 20 0 0 20 1 15 20 2 34 20 3 51 20 4 65 20 5 74 20 6 80 20 7 80 20 8 75 (b) What is relationship between MP and AP? Explain why MP first rises, then declines and ultimately becomes negative? (c) Whether the above phenomenon is long run or short run and why? (d) Does law of diminishing marginal returns holds in above scenario? Why and why not.
Cowles Foundationfor Research in Economicsat Yale UniversityCowles Foundation Discussion Paper No. 2021ARE WE APPROACHING AN ECONOMIC SINGULARITY?INFORMATION TECHNOLOGY AND THE FUTUREOF ECONOMIC GROWTHWilliam D. NordhausSeptember 2015An author index to the working papers in theCowles Foundation Discussion Paper Series is located at:http://cowles.yale.edu/This paper can be downloaded without charge from theSocial Science Research Network Electronic Paper Collection:http://ssrn.com/abstract=2658259Electronic copy available at: http://ssrn.com/abstract=2658259Are We Approaching an Economic Singularity?Information Technology and the Future of Economic GrowthWilliam D. Nordhaus1September 1, 2015AbstractWhat are the prospects for long-run economic growth? The presentstudy looks at a recently launched hypothesis, which I label Singularity.The idea here is that rapid growth in computation and artificialintelligence will cross some boundary or Singularity after whicheconomic growth will…
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?
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
What is meant by returns to factor? State 3 phrases of the law of variable proportion.