Does the production function below show constant, increasing, or decreasing returns to scale if the firm increases thequantity of labor and capital used froma. 2L and 2K to 3L and 3K?b. 4L and 4K to 6L and 6K?Required: Provide graphs, solution and assumption.Capital (K)123456137101212102818232828243122833363631Labor (L)414303640403651430364042406122833364039I

In order to check for the increasing , decreasing or constant return to scale , we multiply the…

Answered: Does the production function below show…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Assume that the production of wine requires land (T) and labor (L) and it follows diminishing returns to scale. This would mean that as you increase the labor input, keeping land fixed, the marginal product of labor would: a) Remain the same b) Increase c) Decrease d) Increase first and then decrease
1. Which of the following production functions do not exhibit constant returns to scale? A. F(K, L) AK L¹-a B. F(K, L) AK + BL C. F(K,L)=L D. F(K,L) = K(1-e-(L/K)) E. None of the above
Suppose you run a factory whose short-run production function is given by f (L) = 180L² – 3L³. (a) Find mathematical expressions for the total product of labor, the average product of labor and the marginal product of labor. (b) On two separate axes, graph TPL, APL, and M PL. The diagrams do not need to be scale, but be sure they are internally consistent. In other words, make sure that all relevant relationships between the three lines are correct. If you have trouble figuring out what the graph looks like, feel free to use a graphing calculator or an online graphing tool to find the basic shape. Find the quantity of labor associated with each of the following points and label it on your diagram: (i) the maximum value of TPL, (ii) the maximum value of APL, (iii) the maximum value of MPL. (c) For what values of L does the production function exhibit each of the following: i. increasing marginal labor productivity ii. diminishing marginal labor productivity iii. negative marginal labor…
The production function for soy beans is q = K 0.25 L 0.45. Dose this production function have constant, increasing or decreasing return to scale? A. may be increasing or decreasing B. Constant return to scale C. Decreasing return to scale D. Increasing return to scale
Consider the following production function: q = 2V1 + 3VK Assume K = 16, derive the marginal product schedule for L. What direction is it moving? a. b. What returns to scale does the production function exhibit? Explain Let w = $4, r = $2, and K = 16; for the given values of a determine average fixed costs, average variable costs, average total costs, and marginal costs: C. L AFC AVC ATC MC 9 12 13 14 15 16 K 16 16 16 16 16
Is each of the following statements true or false? In either case, briefly justify your answer. (a) If a firm has economies of scale, then its average cost is decreasing and lower than its marginal cost. (b) A firm whose total cost function is C(Q)=Q^2+Q must have economies of scale. (c) A firm with total cost function ?(Q) = 3Q+2 must have constant returns to scale. Plz do fast asap
Which of the following production functions exhibits increasing returns to scale in the factors of production K and L? a. y = ĀK0.3 L0.75 b. y = Kª(ĀL)-e,0 < a < 1 c. y = ĀKO.3L0.3 d. y = ĀK/4 + L³/4
Quantity 1 2 3 4 5 6 7 Firm 4 Firm 3 Long-Run Total Cost (Dollars) Firm 1 Firm 1 180 350 510 660 800 930 1,050 Firm 2 120 250 390 540 700 870 1,050 Refer to Table above. Which firm has economies of scale and then diseconomies of scale over the entire range of output? Firm 2 Firm 3 150 300 450 600 750 900 1,050 Firm 4 210 340 490 660 850 1,060 1,290
Determine whether the following statements are TRUE or FALSE. Explain your answer using graphs or examples. c. If a firm has a constant return to scale production function, then production capacity is limitless even in the short run. d. In relation to three types of return to scale, the long-run average U-shaped cost never exists.
Provethatthetechnologyf(L,K)=L2+K2 exhibitsincreasingreturnstoscale. What is the formula for the average product of capital? For the total cost curve TC(q) = q3, prove the technology exhibits decreasing returns to scale
1. Do the following production functions exhibit increasing, constant of decreasing returns to scale in K and L? Explain/interpret your answer. (a) Y = KL (b) Y = KL (c) Y = K³L¹
Identify the returns to scale in the functions below. Production Function a. q = 3L + 2K Returns to Scale constant increasing decreasing

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Does the production function below show constant, increasing, or decreasing returns to scale if the firm increases the quantity of labor and capital used from a. 2L and 2K to 3L and 3K? b. 4L and 4K to 6L and 6K? Required: Provide graphs, solution and assumption.