Consider the "Cobb-Douglas" production function given by Y = AKL¹-a where A > 0 and 0 < a < 1. Which of the following is FALSE? The marginal product of capital is positive The marginal product of labour is positive There is diminishing returns to capital There is decreasing returns to scale

Consider the "Cobb-Douglas" production function given by Y = AKL¹-a where A > 0 and 0 < a < 1. Which of the following is FALSE? The marginal product of capital is positive The marginal product of labour is positive There is diminishing returns to capital There is decreasing returns to scale

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 5P

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If capital and labour are perfect complements then the marginal products of capital and labour are undefined A True Faise Question 16 A firm uses 10 units of labour and 20 units of capital to produce 10 units of output. The marginal product of labour is 0.5. If there are constant returns to scale the marginal product of labour must be 0.25 True B False Question 17 Afirm uses 10 units of labour and 30 units of capital to produce 10 units of output. The marginal product of labour is 05. If there are constant returns to scale the marginal product of labout must be 0.25 A True False
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se The marginal product of labor can be determined using the total product of labor Production Function curve. 3,500- se Using the equation for the production function, 3,000- 3 2 q= 8LK + 5L2 – 2,500- see the level of output when L= 5 and K= 25 is (Enter a numeric response using 2,000- a real number rounded to two decimal places). 3 1,500- When labor is 5 units and K is 25, the marginal product of labor is 1 1,000 *** When labor increases to 12 units and K is 25, the marginal product of labor is 500 - 12 10 15 Labor Input (L) 15 20 25 DEC 25 tv 20 MacBook Air DII SO F10 F11 F9 F3 F4 * %23 $ & 4 6 8 { } E Y U P D F G н J K > C V N M command option - - ... .- V Product or Output (g) B R
Consider the production function Y AK°Lta, where A is a constant, L is labour, K is capital and a 0. Which of the following is true? O The marginal product of labour is constant O The marginal product of labour is diminishing There are increasing returns to scale O There are decreasing returns to scale
The Acme Anvil Company's output is given by the Cobb-Douglas Production function P = 60L2/3 K1/3, where P is the number of anvils produced when Lis the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 150 and K = 150? b. Find the marginal productivities. C. Evaluate the marginal productivities with L = 150 and K = 150. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $300 then there is a constraint L+ K = 300. Use Lagrange multipliers (2) to find the values of L and K that will maximize production and find the maximum production f. Find 2. 12| is called the marginal productivity of money and will give the number additional units produced for each dollar increase in the budget. Interpret 2 for this problem. MacBook Pro urses/34419/files/5014304?wrap=1
You have been doing research for a firm andhave discovered that the firmâ€™s averageproduct of capital is decreasing. If capital is the onlyvariable input, what does this imply about the firmsmarginal product of capital?
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X 15:01 EC5011 - Seminar 2.do... II. Problems and Exercises .ıl 4 1. Consider the following production function: . Does this production function exhibit constant returns to scale? (Hint: Replace K and L by 2K and 2L, respectively, and check if F(2K, 2L) = 2F(K, L).) 2. Consider the following production function: . a. Calculate the marginal product of labour. b. Calculate the marginal product of capital. c. Does this production function exhibit diminish MPL and MPK? d. Does this function exhibit constant returns to scale? 3. Suppose represents the production function of both Mexico and Spain. Use the following information to answer the next questions. L = Population K = Capital Y = Output Country (millions) (trillion) (trillion) Mexico 105 0.18 1.0 Spain 45 0.74 1.7 a. Calculate total factor productivity for both countries using the PF in question 2. b. Calculate per capita income for both countries. c. Explain the difference in per capita income. 4. A snack food factory in the Tuas…