Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 21.3, Problem 2ST
To determine
Explain the situation of law of diminishing return.
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As we add more capital to more labor, eventually the law ofdiminishing marginal returns will set in.What is wrong with this statement?
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Chapter 21 Solutions
Economics (MindTap Course List)
Ch. 21.2 - Prob. 1STCh. 21.2 - Prob. 2STCh. 21.2 - Prob. 3STCh. 21.2 - Prob. 4STCh. 21.3 - Prob. 1STCh. 21.3 - Prob. 2STCh. 21.3 - Prob. 3STCh. 21.4 - Prob. 1STCh. 21.4 - Prob. 2STCh. 21.4 - Prob. 3ST
Ch. 21.4 - Prob. 4STCh. 21.5 - Prob. 1STCh. 21.5 - Prob. 2STCh. 21.5 - Prob. 3STCh. 21 - Prob. 1QPCh. 21 - Prob. 2QPCh. 21 - Prob. 3QPCh. 21 - Prob. 4QPCh. 21 - Prob. 5QPCh. 21 - Prob. 6QPCh. 21 - Prob. 7QPCh. 21 - Prob. 8QPCh. 21 - Prob. 9QPCh. 21 - Prob. 10QPCh. 21 - Prob. 11QPCh. 21 - Prob. 12QPCh. 21 - Prob. 13QPCh. 21 - Prob. 14QPCh. 21 - Prob. 15QPCh. 21 - Prob. 16QPCh. 21 - Prob. 17QPCh. 21 - Prob. 18QPCh. 21 - Prob. 19QPCh. 21 - Prob. 1WNGCh. 21 - Prob. 2WNGCh. 21 - Prob. 3WNGCh. 21 - Prob. 4WNGCh. 21 - Prob. 5WNGCh. 21 - Prob. 6WNGCh. 21 - Prob. 7WNGCh. 21 - Prob. 8WNGCh. 21 - Prob. 9WNG
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- You are the owner of a puppet manufacturing company. Suppose that labour is the only variable input to the production process. If the marginal cost of production is diminishing as more units of output are produced, what can you say about the marginal product of labour?arrow_forwardPlease only answer d Consider the following Cobb-Douglas production function: Y = 10 L^0.4 K^0.4. Suppose that the price of labor is w = 20 and the price of capital if r = 40. a- Derive the total cost curve for this production function. b- Derive the marginal cost curve for this production function. c- Plot the marginal and total cost curves for q = 1,2,3,4,5. What does it tell you about economies of scale for the production function? d- Suppose that the wage rate went up from 20 to 30. What would happen to the total wage bill relative to total costs wL/(wL+rK) What would happen to total costs?arrow_forwardI need answer typing clear urjent no chatgpt i will give upvotearrow_forward
- How does the marginal product curve behave when there are diminishing returns to a factor. Give reason also.arrow_forwardWhat is the average product doing when the marginal product is decreasing? Why?arrow_forward1. Suppose the production function of a firm is given as: Q = 5L + 10L2 – 2L³ a. Find the number of labors that would yield maximum values of TP, AP, andarrow_forward
- Consider a firm that employs capital and labour and uses the productiontechnology Q = min[K, L] (think of taxi cabs: you need exactly one car and one driver per taxi).Factor prices are r for capital and w for labour.a) Draw the isoquant for Q = 100.b) Does this production function exhibit increasing, constant, or decreasing returns toscale? Show/explain.c) What is the optimal relationship between K and L? What is the input demand for Labour(L as a function of Output) and the input demand for Capital?d) Derive the long-run cost function: (eg C = wL + rK where L and K are optimal choices).e) What is the long-run marginal and average cost function with r = 4 and w = 4?f) What is the cost of Q=100? Q= 200?g) Does this cost function exhibit increasing, constant, or decreasing economies of scale?arrow_forwardPlease answer fast and Arjent pleasearrow_forwardThe diagram below shows an agricultural production function. 900- 800- 700- 600- 500- 400- 300- 200- 100- 400 800 1200 1600 2000 2400 2800 Number of farmers Kilogrammes of grain produced (thousands)arrow_forward
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