PRIN.OF ECON.ACCESS CODE
2nd Edition
ISBN: 9780393691757
Author: Mateer
Publisher: NORTON
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Chapter 8, Problem 3QFR
To determine
Role of diminishing marginal product in determination of ideal labor-capital combination of a firm
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If marginal physical product is continually declining, what does marginal cost look like?
At what level of production does the marginal cost have the least value? What is the marginal cost at this level of production?
What effect, if any, does diminishing marginal product have on the shape of the marginal cost curve?
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PRIN.OF ECON.ACCESS CODE
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- Explain why the marginal cost of production must increased if the marginal product of the marginal resource is decreasing.arrow_forwardWhat explains the shape of the average and marginal cost curves? Is it linked to any production relationships?arrow_forwardHow does labor influence marginal product? There's the saying "the more the merrier," but is this always the case? Can you think of a scenario in which too much labor would decrease output? Share personal experiences where additional labor either helped or hurt productivity.arrow_forward
- Why might marginal product be increasing at lower levels of output and decreasing at higher levels of output?arrow_forwardWhat shapes would you generally expect a total product curve and a marginal product curve to have?arrow_forwardHow are economies of scale achieved in labor? Please answer in own wordarrow_forward
- Among the three stages of production, until what point should one produce considering the law of diminishing marginal product?arrow_forwardA production function is represented by P=f(L), where L is labour. As input L increases, the total output will increase but what will happen to marginal product? Can marginal product be zero? if so, what it meanarrow_forwardHow would you derive marginal cost from total cost?arrow_forward
- What is the difference between the labor intensive production and capital intensive production approach.arrow_forwardExplain any assumptions and arguments we must use in order to conjecture that firms choose the production level that minimises their average cost under some reasonable conditions.arrow_forwardIs it possible to increase the labor productivity (output per unit of labor) in a given production process which exhibits diminishing returns to labor? If so, how?arrow_forward
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