Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134643175
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 6, Problem 11RQ
To determine
The diminishing returns to a single factor of production and constant returns to scale.
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Show that increasing returns to scale can co-exist with diminishing marginal productivity.
Show that the following production function has constant returns to scale. It can be
through a particular example or by demonstrating the general case.
1/21/2
y = 5x;"x;2
True or false. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain why you think so.
Chapter 6 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
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- Explain how a change in the price of one input factor changes a firm’s long-run expansion path?arrow_forwardExplain how a firm can have constant returns to scale in production and economies of scale in cost.arrow_forwardShow using math and logic that for constant returns to scale production functions, MRTS between labor and capital depends only on the K/L ratio, and not the scale of production.arrow_forward
- When do you think production is on the part of increasing returns on the production function? Explain.arrow_forwardExplain why an increase in the price of an input must typically cause an increase in the long-run total cost of producing any particular level of output.arrow_forwardExplain in details and stepsarrow_forward
- Q2. Given a production function Q = f (K, L) = K² + 2L, both capital and labour are doubled, does this production function display increasing, decreasing or constant returns to scale? Show the complete working and explain what returns to scale is noticed.arrow_forwardWhich of the following can we conclude when production has economies of scale? Marginal cost increases as output expands. Marginal product of an input diminishes with increased utilization. Long-run average total cost declines as output expands. U Long-run average total cost increases as output expands.arrow_forwardWhat is the distinction between the laws and of returns and the returns to scale?arrow_forward
- What is the Short run and long run period in the production function of the economicsarrow_forwardUse the diagram of production function to explain why variable costs increases at a decreasing rate and then increases at an increasing rate.arrow_forwardEconomic1. For each of the following production functions, determine whether there areincreasing, constant or decreasing returns to scale. a)Q = 3K + 4L b)Q = K + L + KL c)Q = 18K^ 0.6 L^0.3arrow_forward
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