The figure shows the production function of a farmer who produces grain by working certain hours each day. Which of the following statements is correct about this production function? a. The slope of the production function represents the marginal rate of substitution. b. The ceteris paribus assumption means that the farmer becomes more productive as he works more hours. c. A rightward movement from B along the production function implies that the farmer has better technology. d. This production function exhibits economies of scale. e. A technological improvement would shift up the production function
The figure shows the production function of a farmer who produces grain by working certain hours each day. Which of the following statements is correct about this production function? a. The slope of the production function represents the marginal rate of substitution. b. The ceteris paribus assumption means that the farmer becomes more productive as he works more hours. c. A rightward movement from B along the production function implies that the farmer has better technology. d. This production function exhibits economies of scale. e. A technological improvement would shift up the production function
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
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The figure shows the production function of a farmer who produces grain by working certain hours each day.
Which of the following statements is correct about this production function?
a.
The slope of the production function represents the marginal rate of substitution.
b.
The ceteris paribus assumption means that the farmer becomes more productive as he works more hours.
c.
A rightward movement from B along the production function implies that the farmer has better technology.
d.
This production function exhibits economies of scale.
e.
A technological improvement would shift up the production function
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