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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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