31) Which of the following statements is true? A) The average product of labor is at its maximum when the average product of labor equals the marginal product of labor. B) The average product of labor is at its minimum when the average product of labor equals the marginal product of labor. C) The average product of labor tells us how much output changes as the quantity of workers hired changes. D) Whenever the marginal product of labor is greater than the average product of labor the average product of labor must be decreasing. 32) Which of the following explains why the marginal cost curve has a U shape? A) Initially, the marginal product of labor rises, then falls. B) Initially, the average product of labor falls, then rises. C) Initially, the marginal product of labor falls, then rises. D) Initially, the average cost of production rises, then falls. 33) If marginal cost is above the average variable cost, then average variable cost is decreasing. A) TRUE B) FALSE

31) Which of the following statements is true? A) The average product of labor is at its maximum when the average product of labor equals the marginal product of labor. B) The average product of labor is at its minimum when the average product of labor equals the marginal product of labor. C) The average product of labor tells us how much output changes as the quantity of workers hired changes. D) Whenever the marginal product of labor is greater than the average product of labor the average product of labor must be decreasing. 32) Which of the following explains why the marginal cost curve has a U shape? A) Initially, the marginal product of labor rises, then falls. B) Initially, the average product of labor falls, then rises. C) Initially, the marginal product of labor falls, then rises. D) Initially, the average cost of production rises, then falls. 33) If marginal cost is above the average variable cost, then average variable cost is decreasing. A) TRUE B) FALSE

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Con Co. produces a collectible card game. Currently, the price of capital is at $50 and the price of labor is at $10. The marginal product of capital is 200 and the marginal product of labor is 30. To minimize cost of the given output, Con Co. should Use more capital Use more capital and labor Leave capital and labor as is Use more labor
Grease Tech produces oil changes. The production of oil changes reles on both capital (K) and labor (L) and is combined in the following production function F (K, L) = KILL Take the derivative of this production function with respect to capital. What is the marginal product of capital evaluated at (le. just plug in the numbers) 64 units of capital used and 16 units of labor?
Barb's Bakery employs three workers who produce 6 cakes per hour. After Barb hires a fourth worker, production increases to 12 cake per hour. Which of the following statements is TRUE? a. b. C. d. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is less than the average product of three workers, the average product must fall Because the marginal product of the fourth worker is less than the average product of three workers, the average product must rise. Because the marginal product of the fourth worker is greater than the average product of three workers, the average product must fall.
Subpart 4
The figure shows the production function of a farmer who produces grain by working certain hours each day. Which of the following statements is correct about this production function? a. The slope of the production function represents the marginal rate of substitution. b. The ceteris paribus assumption means that the farmer becomes more productive as he works more hours. c. A rightward movement from B along the production function implies that the farmer has better technology. d. This production function exhibits economies of scale. e. A technological improvement would shift up the production function
GM cuts jobs at its Australian manufacturing unit GM will cut 500 jobs, or about 12% of its workforce, at its Australian plant because of a sharp fall in demand for its locally-made "Cruze" small car. Source: The Wall Street Journal, April 8, 2013 As GM cuts its workforce, how will the marginal product and average product of a worker change in the short run? Suppose that before the cuts the marginal product of GM workers is below their average product. As the number of workers decreases, the marginal product of a GM worker and the average product of a GM worker in the short run. increases; decreases does not change; does not change decreases; decreases increases; increases decreases; increases
6
Sandwiches, a sandwich shop, has the following marginal product curve (labelled MP) for its hourly productions hourly production.
2. Consider a Cobb-Douglas production function with three inputs. K is capital (the number of machines), L is labor (the number of workers), and H is human capital (the number of college degrees among the workers). The production function Y = K2/6 L3/6 H1/6 a) Derive an expression for the marginal product of labor. How does an increase in the amount of human capital affect the marginal product of labor? (Hint: The marginal product of labor MPL is found by differentiating the production function (Y) with respect to labor (L)) b) Derive an expression for the marginal product of capital. How does an increase in the amount of human capital affect the marginal product of capital? (Hint: The marginal product of capital MPK is found by differentiating the production function (Y) with respect to capital (K)).
None