QUESTION 8 Suppose that the production function y-f(x_1,x_2) (where: y is output level, x_1 is a variable input and x_2 is a fixed input plotted in the (y, x_1) space. According to economic theory, we would expect: O ay to increase with x 1 at a decreasing rate, due to increasing returns to scale. O b.y to increase with x_1 at an increasing rate, due to diminishing returns to scale. OCy to increase with x_1 at a decreasing rate, due to diminishing returns to scale. O d.y to increase with x_1 at an increasing rate, due to increasing returns to scale. QUESTION 9 In the cost minimisation model found in Varian (2014, Ch. 21), an isocost curve is: O a. The locus of output (y) and variable input x_1 associated with a same cost level. Ob. The locus of variable input x 1 and variable input x_2 associated, associated with a same ouput level. CCTHE locus of cost of variable input x_1 and cost of variable input x_2. Cd The locus of variable input x_1 and variable input x_2 associated with a same cost level.

QUESTION 8 Suppose that the production function y-f(x_1,x_2) (where: y is output level, x_1 is a variable input and x_2 is a fixed input plotted in the (y, x_1) space. According to economic theory, we would expect: O ay to increase with x 1 at a decreasing rate, due to increasing returns to scale. O b.y to increase with x_1 at an increasing rate, due to diminishing returns to scale. OCy to increase with x_1 at a decreasing rate, due to diminishing returns to scale. O d.y to increase with x_1 at an increasing rate, due to increasing returns to scale. QUESTION 9 In the cost minimisation model found in Varian (2014, Ch. 21), an isocost curve is: O a. The locus of output (y) and variable input x_1 associated with a same cost level. Ob. The locus of variable input x 1 and variable input x_2 associated, associated with a same ouput level. CCTHE locus of cost of variable input x_1 and cost of variable input x_2. Cd The locus of variable input x_1 and variable input x_2 associated with a same cost level.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

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