7. Consider the production function Y = zx F(K,N,L) where Y is output, z is technology, K is capital, N is labour and L is the area of land. A. If z increases, both average and marginal products of all inputs increase. B. Diminishing marginal products means that if K, N and L all double, output will less than double. C. Holding K and L constant, if z increases the production function in terms of labour input shifts up by a constant amount at all levels of labour input. D. If the marginal product of labour is a decreasing function of labour input, the marginal product of labour measured in terms of an increase in labour input of one unit is less than the marginal product in terms of calculus.
7. Consider the production function Y = zx F(K,N,L) where Y is output, z is technology, K is capital, N is labour and L is the area of land. A. If z increases, both average and marginal products of all inputs increase. B. Diminishing marginal products means that if K, N and L all double, output will less than double. C. Holding K and L constant, if z increases the production function in terms of labour input shifts up by a constant amount at all levels of labour input. D. If the marginal product of labour is a decreasing function of labour input, the marginal product of labour measured in terms of an increase in labour input of one unit is less than the marginal product in terms of calculus.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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Transcribed Image Text:7. Consider the production function
Y = zxF(K,N,L)
where Y is output, z is technology, K is capital, N is labour and L is the area of land.
A. If z increases, both average and marginal products of all inputs increase.
B. Diminishing marginal products means that if K, N and L all double, output will less
than double.
C. Holding K and L constant, if z increases the production function in terms of labour
input shifts up by a constant amount at all levels of labour input.
D. If the marginal product of labour is a decreasing function of labour input, the marginal
product of labour measured in terms of an increase in labour input of one unit is less
than the marginal product in terms of calculus.
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