Consider the production equation from the lecture videos, Q=f(To, Td).Where Q is wins, To is offensive talent, and Td is defensive talent.If defensive talent is held constant, and a team has a lot offensive talent and gets more offensive talent, what happens?A. Wins increase and do so at an constant rateB. Wins increase and do so at an increasing rateOC. Wins decreaseOD. Wins increase and do so at an decreasing rate

Answered: Consider the production equation from…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the production equation from the lecture videos, Q=f(To, Td).
Where Q is wins, To is offensive talent, and Td is defensive talent.
If defensive talent is held constant, and a team has a lot offensive talent and gets more offensive talent, what happens?
A. Wins increase and do so at an constant rate
B. Wins increase and do so at an increasing rate
OC. Wins decrease
OD. Wins increase and do so at an decreasing rate

Expert Solution

Introduction

If there are 2 inputs then if we keep one input constant and start increasing another input then the production function goes through 2 stages:

A) Increasing returns: If relative to input (which is held constant) the another input starts from a very low level then the value of the output increase at increasing rate with the increase of that input.

B) Decreasing returns: If relative to input (which is held constant) the another input starts from a very high level then the value of the output increase at decreasing rate with the increase of that input.

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