Suppose that a firm's long-run production function where A>0 Which one of the following is true? ALK O The marginal products of L and K are homogeneous of degree 1.3 and the marginal rate of technical substitution is homogeneous of degree 0.3. Ob The marginal products of L and K are homogeneous of degree 1.3 and the marginal rate of technical substitution is homogeneous of degree 1.3. OC The marginal products of L and K are homogeneous of degree 0.3 and the marginal rate of technical substitution is homogeneous of degree 0.3. The marginal products of and g are homogeneous of degree 03 and the marginal rate of technical substitution is homogeneous of degree zero. Oe The marginal products of and g are homogeneous of degree 1.3 and the marginal rate of technical substitution is homogeneous of degree 1.

Suppose that a firm's long-run production function where A>0 Which one of the following is true? ALK O The marginal products of L and K are homogeneous of degree 1.3 and the marginal rate of technical substitution is homogeneous of degree 0.3. Ob The marginal products of L and K are homogeneous of degree 1.3 and the marginal rate of technical substitution is homogeneous of degree 1.3. OC The marginal products of L and K are homogeneous of degree 0.3 and the marginal rate of technical substitution is homogeneous of degree 0.3. The marginal products of and g are homogeneous of degree 03 and the marginal rate of technical substitution is homogeneous of degree zero. Oe The marginal products of and g are homogeneous of degree 1.3 and the marginal rate of technical substitution is homogeneous of degree 1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q2
Suppose that a firm has a production function given by: q= 10 L² K. The firm has 10 units of capital in the short run. Which of the following will describe the marginal product of labor (MPL) for this production function? Select one: a. Constant Marginal Returns to Labor b. Increasing Marginal Returns to Labor O c. Decreasing Marginal Returns to Labor
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In the Cost Minimization Problem, the isoquant curve for an output level equal to the output quota? Illustrates the cost of labor and capital a firm pays to produce a level of output in excess of an output quota. Illustrates all combinations of labor and capital that a firm cannot afford. Illustrates all combinations of labor and capital that a firm can afford. O Illustrates all combinations of labor and capital that a firm can use to produce a level of output equal to the output quota.
1 This question is based on the following diagram. Assume that the dashed lines are parallel and that their common slope is equal to b. (That is, b represents a constant.) Moreover, assume that I in the diagram is an inflection point on the total product curve. {Note: An answer "K to N" is different from an answer "above K".} a. TOTAL OUTPUT C. AL KL M N 0 INPUT At what level of the variable input do diminishing marginal returns begin to set in? b. At what level of the variable input does the average product equal the marginal product? For what range of values of the variable input does the average product exceed the marginal product?
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2
Which of the following statements is true? O At every output level the marginal product curve lies above the average product curve. The marginal product curve always has a positive slope. The marginal product = average product curves when average product is at its maximum. O The marginal and average product curves intersect at the maximum level of output.
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