Question # 1:Majeda wrote the following answer on her microeconomics examination: “Virtually every productionfunction exhibit diminishing returns to scale because my professor said that all inputs have diminishingmarginal productivities. So, when all inputs are doubled, output must be less than double." How would yougrade Majeda's answer?Question # 2:Suppose a firm had a production function with linear isoquants, implying that its two inputs were perfectsubstitutes for each other. What would determine the firm's expansion path in this case? For the oppositecase of a fixed-portions production function, what would the firm's expansion path be?Question # 3:Suppose that a firm's production function is q = 30√L. In the short run, where there are fixed costs of$2,200, and labor is the variable input whose cost is $6,300 per units. What is the total cost of producing20 units of output?

Diminshing returns to scale refer to reduced efficiency when increasing all inputs, resulting in a…

Question # 1: Majeda wrote the following answer on her microeconomics examination: "Virtually every production function exhibit diminishing returns to scale because my professor said that all inputs have diminishing marginal productivities. So, when all inputs are doubled, output must be less than double." How would you grade Majeda's answer?

Question # 1: Majeda wrote the following answer on her microeconomics examination: "Virtually every production function exhibit diminishing returns to scale because my professor said that all inputs have diminishing marginal productivities. So, when all inputs are doubled, output must be less than double." How would you grade Majeda's answer?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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