The acceptability of the statement.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 2.7P

To determine

The acceptability of the statement.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

4. A firm producing cars. The production function for shoes (Q) is: Q = K2 L"2 where K is capital and L is labor. The price of K is $8 and the price of L is $2. a. What type of production function is this? b. Does this production function exhibit constant, increasing or decreasing returns to scale? Explain. c. What is the average product of capital, average product of labor, marginal product of capital, and marginal product of labor? d. Does capital obey the "law of diminishing returns?" Explain. e. Suppose that firm wants to produce 144 cars, how much K and L should be employed to minimize costs? f. What is the minimum cost of producing 144 cars? g. Now suppose that firm is faced with the same problem as in (e and f) except that firm has a fixed amount of K. In fact, K = 16. How much L should be employed to minimize costs, and what is the total cost.

4.8 Michelle's business produces ceramic cups using labor, clay, and a kiln. She uses labor and clay in a fixed proportion, but has only one kiln. She can manufacture 25 cups a day with one worker and 35 with two workers. a. Does this information illustrate decreasing returns to scale or a diminishing marginal product of labor? What is the likely explanation for why output doesn't increase proportionately with the number of workers? b. Michelle believes that if she could use two kilns and two workers, she could produce 55 cups a day. If so, what can you say about returns to scale? 11 1 1

hi Suppose you build bird houses. One day, you double the time you spend building and double the wood, nails, paint, and all the other inputs in order to build twice as many bird houses. What kind of production function is this? options: increasing returns to scale constant returns to scale decreasing returns to scale zero returns to scale