Ed's building company has the following production function: Q(L)-10LK-0.5L-K where Q is the number of houses built, L is the quantity of labor Ed employs, and K is the quantity of capital Ed employs. In the short-run, capital is fixed at 2. Which of the following statements is FALSE? a. For L < 10, total product of labor is increasing at a decreasing rate. b. For L> 10, total product of labor is decreasing at an increasing rate. c. For L < 10, marginal product of labor is positive and decreasing at a decreasing rate. d. For L>0, marginal product of labor is always below APL.
Ed's building company has the following production function: Q(L)-10LK-0.5L-K where Q is the number of houses built, L is the quantity of labor Ed employs, and K is the quantity of capital Ed employs. In the short-run, capital is fixed at 2. Which of the following statements is FALSE? a. For L < 10, total product of labor is increasing at a decreasing rate. b. For L> 10, total product of labor is decreasing at an increasing rate. c. For L < 10, marginal product of labor is positive and decreasing at a decreasing rate. d. For L>0, marginal product of labor is always below APL.
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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Transcribed Image Text:1. Ed's building company has the following production function: Q(L)-10LK-0.5L-K
where is the number of houses built, L is the quantity of labor Ed employs, and K is the
quantity of capital Ed employs. In the short-run, capital is fixed at 2. Which of the following
statements is FALSE?
a. For L < 10, total product of labor is increasing at a decreasing rate.
b. For L> 10, total product of labor is decreasing at an increasing rate.
c. For L < 10, marginal product of labor is positive and decreasing at a decreasing rate.
d. For L> 0, marginal product of labor is always below APL.
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