Answer the ff. 1. suppose you operate a sandwich shop and currently have 2 employees. if you hire a 3rd employee, your output of sandwiches per day rises from 75 to 90
Answer the ff.
1. suppose you operate a sandwich shop and currently have 2 employees. if you hire a 3rd employee, your output of sandwiches per day rises from 75 to 90. if you hire a 4th employee, ouput rises to 110 per day. a 5th and 6th employee would cause output to rise to 120 and 125 per day respectively. choose the correct statement
a. diminishing returns have not yet set in because output is still increasing
b. diminishing returns set in with the hiring of the 4th worker
c. diminishing sets in with the hiring of the 5th worker
d. diminishing returns set in with the hiring of the 6th worker
2. a production function measures the relation between
a. input prices and output prices
b. input prices and the quantity output
c. the quantity of of inputs and the quantity of output
d. the quantity of inputs and the input prices
3. the short run production function assumes that
a. the usage of at least one input is fixed
b. the level of output is fixed
c. all inputs are fixed inputs
d. both a and b
4. which of the following statements is TRUE
a. a firm plans in the short run and operates in the long run
b. in the long run a firm can change all but one input
c. in the long run all inputs are variable
d. in the short run all inputs are fixed
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