3. Suppose that total product increases as the firm uses more labor in the short-run, but labor exhibits a diminishing marginal return. Which of the following is necessarily true? > 0 and <0 a. b. C. d. e. dMPL dL dQ dL dMRTS dL dMPL dL dQ dL > 0 and <0 d² MPL dL² d²Q dL² < 0 and > 0 and < 0 and dMRTS dk dMRTS dL dMPL dL >0 <0 >0

3. Suppose that total product increases as the firm uses more labor in the short-run, but labor exhibits a diminishing marginal return. Which of the following is necessarily true? > 0 and <0 a. b. C. d. e. dMPL dL dQ dL dMRTS dL dMPL dL dQ dL > 0 and <0 d² MPL dL² d²Q dL² < 0 and > 0 and < 0 and dMRTS dk dMRTS dL dMPL dL >0 <0 >0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How is the LRAC derived? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b Question 28 C d by drawing an average cost curve in which capital is variable but labor is fixed at the largest amount the firm can hire by assuming the firm is minimizing total costs at all levels of output by finding the largest amount of capital the firm can afford to use, and viewing the output capabilities of that capital amount by finding the lowest average cost of producing any level of output, assuming all inputs can be varied
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8.Suppose the marginal product of labor is MPL=10 and the cost of each worker is w=50. What is the marginal cost at this point? Hint: In discrete terms, MPL=output from adding an additional worker, w=cost of an additional worker, and MC=cost of an additional unit of output.
6 A firm spends $12,000 per day producing a good. The wage per worker is $200 per day and rental rate 1/3 2/3 3." per unit of capit.al is $400 per day. The firm faces the production function y = The cost-minimizing level of capital is and the cost-minimizing level of labor is
1. Assume a daily production function for a firm is Q= min(3L, 4K) a, If L = 100 and K = 100 what quantity is produced? Explain why. b. What would be the cost-minimizing labor and capital combination for this firm to produce Q = 1200? (show your work) Labor = Capital = At this level of production from part b (Q-1200), if the wage rate is: w- $30 and the rental rate of capital is: r= $100, what is the total cost of production? (show your calculations) C.
Bozo is a clown. He wants to start a clowning business where he sends other clowns out to birthday parties. Use the graph to Birthday parties answer the questions. 20 19 18 17 16 15 14 13 12 What is the marginal product of the third worker? O 2 11 10 6. 8. 7. 3.0 9. 3. 2. I 2 3 9 10 4 56 8. This production function demonstrates Workers diminishing marginal costs. a negative marginal product of labor. diminishing marginal returns to labor. diminishing output.
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Q. Table 3 above shows how output varies with only one variable input used in production. If the cost of a unit of labor is $500, what is the approximate marginal cost of the 230th unit of output? a. $2.50 b. $8.50 c. $12.50 d. $50.00 e. $100.00
Y5 If a firm uses n inputs (n > 2), what inequality does the theory of revealed cost mini- mization imply about changes in factor prices (∆wi) and the changes in factor demands (∆xi) for a given level of output?
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