Answered: Constant returns to scale (CRS) implies…

Constant returns to scale (CRS) implies variable total factor productivity constant returns to capital increasing marginal products constant returns to labor diminishing marginal products

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 3SQP

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Question

Constant returns to scale (CRS) implies
variable total factor productivity
constant returns to capital
increasing marginal products
constant returns to labor
diminishing marginal products

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True or false The law of diminishing returns implies that the marginal product of labor (MPL) is increasing as labor input increases.
depending on the stages of production(increasing returns, diminishing returns, negative returns) can a rational firm limitits production within satge I, and explain the relationship between average and marginal product of labour.
The table below shows the weekly relationship between output and number of workers for a factory with a fixed size of plant. P= 10$: w=100$ a) Calculate the marginal product of labor. b) At what point does diminishing returns set in? C) Calculate the average product of labor. D) Find out optimum level of variable input usage
Resource specialization and division of labor cause the marginal product of labor to increase, but only for a time. Group of answer choices True False
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What does diminishing marginal product imply? The marginal cost of an extra worker is unchanged. The marginal cost of an extra worker is less than the previous worker's marginal cost. The marginal product of an extra worker is less than the previous worker's marginal product. The marginal product of an extra worker is greater than the previous worker's marginal product.
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When Marginal Product of Labor intersects the Average product of labor, minimum average product of labor obtains at the intersection. True False
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When the marginal product of labor is increasing marginal cost is decreasing constant increasing at its maximum
(A) With P = 20, W = 25 and TFC = 500: Labor Output (Q) (L) 5 10 25 35 50 60 10 25 60 70 80 90 Marginal Physical Product of AVC=VC/Q ATC=TC/Q Labour (MPPL) 2 3 4 2 2 1 Average Physical Cost Product of (TC) (VC) Labour (APPL) 2 2.5 2.4 2 1.6 1.5 MPPL = Change in Q / Change in L APPL=Q/L TC = TFC + VC VC=W* L MC = Change in TC / Change in Q Total Variable Marginal Average Cost Variable 625 750 1125 1835 1750 2000 125 250 625 875 1250 1500 Cost (MC) 15 10 6 10 15 30 Average Total Cost Cost (AVC) (ATC) 12.50 10.00 10.42 12.50 15.63 16.62 62.5 30.00 18.75 26.21 21.88 22.22 Based on this table, answer this: 1. How much output will this firm produce? If the price of output increases to $30, how does your answer change? 2. If the productivity of labor increases by 10% (all else equal), how much more labor will the firm hire? 3. Below what price will this firm decide to produce zero units of output? (i.e. shut down)
At the Amarillo Piano Company, the average product of labor stays constant at 5, regardless of how much labor is employed. This implies that Multiple Choice there are no fixed costs. this firm can never maximize its profits. the marginal product of labor is constant. labor exhibits diminishing marginal returns.