1. Roy Dingbat is the manager of a hot dog stand that uses only labor and capital to produce hot dogs. The firm usually produces 1,000 hot dogs a day with 5 workers and 4 grills. One day a worker is absent but the stand still produces 1,000 hot dogs. What does this imply about the 1,000 hot dog isoquant? What does this imply about Roy's management skills?

2. Marjorie Cplus wrote the following answer on her micro examination: "Virtually every production function exhibits diminishing returns to scale because my professor said that all inputs have diminishing marginal productivities. So when all inputs are doubled, output must be less than double." How would you grade Marjorie's answer?

3. Can a fixed-proportions production function exhibit increasing or decreasing returns to scale? What would its isoquant map look like in each case?