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Why does modeling production as convex in inputs probably make sense in the real world?
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- True or False A production function in "economics" summarizes the technological relationship between inputs and outputs.Why does more inputs not necessarily translate into more output?In the short‑run specific‑factors model, consider a decrease in the stock of land. For example, suppose a natural disaster decreases the quantity of arable land used for planting crops. Round values to the nearest one-half unit. a. Demonstrate a change in the supply of land on the accompanying graph. b. New equilibrium wage is? c. New quantity of agricultural labor is?
- Sam Malone is considering renovating the bar stools at Cheers.The production function for new bar stools is given byq = 0.1k 0.2l0.8 where q is the number of bar stools produced during the renovation week, k represents the number of hours of bar stoollathes used during the week, and l represents the number ofworker hours employed during the period. Sam would like toprovide 10 new bar stools, and he has allocated a budget of$10,000 for the project.a. Sam reasons that because bar stool lathes and skilled barstool workers both cost the same amount ($50 per hour),he might as well hire these two inputs in equal amounts.If Sam proceeds in this way, how much of each input willhe hire and how much will the renovation project cost?b. Norm (who knows something about bar stools) arguesthat once again Sam has forgotten his microeconomics.He asserts that Sam should choose quantities of inputs sothat their marginal (not average) productivities are equal.If Sam opts for this plan instead, how much of…The law if diminishing marginal returns is the rate at which one input maybe substituted for another input in the production process? True FalseDavid Ricardo ([1817] 1965) modified Smith’s model by introducing diminishing returns to land cultivation. Diminishing returns implies that as you apply more of a variable input (labor) to a fixed input (land), the productivity of each additional worker will eventually decline as long as technology isfixed. He claimed that land was of variable quality and finite. Thus, as an economy grows, population grows relative to land, and the productivity of the labor on the land will decline. According to Ricardo, the only way stagnation could be averted, at least temporarily, would be through the trade and imports of cheap food or wage goods. The essential doctrines of John Stuart Mill (1848) differed little, if at all, from those of Ricardo. He, like Smith, believed in the doctrine of laissez-faire , but he also recognized the possibility of modifying the system. He displayed a leaning to the socialist ideal, growing closer as his life advanced. He believed that we should sacrifice economic…
- The optimal level of production for any company is the level of production that either maximizes profits or minimizes losses. How does one determine the optimal level of production for any business?explain the elasticities of production function for a neoclassical production function with the help of graphHi, Please help me with this Econ problem, specifically, the demand (D) line shift and responses to the two questions. Thank you!
- An Engineer earns $200 an hour in her profession. She can hire a Housekeeper for $15 an hour to take care of her home. The Engineer is very smart and hard working. She has found out that she can do the Housekeeping work twice as fast as her Housekeeper. Should she fire the Housekeeper and do the work herself? What principle in Economics should be used in answering this question?What is the difference between factor cost and market price? According to macro economics?If the per unit price of labor, a variable resource, increases, it causes which of the following? A. An upward shift in AFC. B. An upward shift in MPL.
