Question 8 of 13The following diagram depicts the production function of the farmers, where diminishing average product of labour is assumed. At A the average product of labour is 500,000/800 = 625kg of grain per farmer. At B the average product of labour is 732,000/1,600 = 458 kg of grain per farmer. If you know that for 2,800 farmers the grain output is 894,000kg, then which ofthe following is/are correct?Kilogrammes of grain produced (thousands)900800-700-600-500400-300-200-100-00400800B1,200 1,600Number of farmers2,000 2,4002,800OA. The average product of labour when the labour input is 2,800 is 300.OB. The decreasing slopes of the rays from the origin to the production function along the curve indicate the decreasing average product of labour.OC. If the production function curve is an upward-sloping straight line, then there is no diminishing average product of labour.OD. It is possible that initially there is an economy of scale: for example, going from one farmer to two, the average output increases as they efficientlyshare the workload.

Production function:Production is a function of land labor capital and entrepreneurship. It includes…

Question 8 of 13 The following diagram depicts the production function of the farmers, where diminishing average product of labour is assumed. At A the average product of labour is 500,000/800 = 625 kg of grain per farmer. At B the average product of labour is 732,000/1,600 = 458 kg of grain per farmer. If you know that for 2,800 farmers the grain output is 894,000kg, then which of the following is/are correct?

Question 8 of 13 The following diagram depicts the production function of the farmers, where diminishing average product of labour is assumed. At A the average product of labour is 500,000/800 = 625 kg of grain per farmer. At B the average product of labour is 732,000/1,600 = 458 kg of grain per farmer. If you know that for 2,800 farmers the grain output is 894,000kg, then which of the following is/are correct?

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

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